Charter School Managers Pocketed Millions in Scam: DC files lawsuit. More oversight needed, please.

[madfloridian]

From the Findlaw website in October.

Charter School Managers Pocketed Millions in Scam: Lawsuit

Please note these are government funds that are being used fraudently. Arne Duncan has the power to step into the fray and get some badly needed oversight. He seems unaware of all the fraud going on. Inexcusable.

Managers for the Options Public Charter School are accused of diverting millions of dollars in government funds toward their own businesses, and the District of Columbia is suing them for it.

According to The Washington Post, the Options school was intended to serve "the District's most troubled teens and students with disabilities," but at least $3 million earmarked for the school were allegedly siphoned away by sophisticated contracting scam....One of the people named in the lawsuit, the Post reports, is local D.C. news fixture J.C. Hayward, who has been accused of helping the three ex-Option managers to incorporate one of the private contracting companies through which federal money was diverted away from the school. Hayward has since been suspended from WUSA Channel 9 pending further investigation.

...Aside from just the general crumminess of misusing money meant for children with disabilities, the complaint alleges that the Options funds were also used to rent and furnish offices for these colluding corporations.

A US attorney says no charges have been filed but they are aware of the issue. Well, it's good they are at least aware.

Mother Jones had some coverage in 2011 of more charter school outrages. There has been plenty of time for those in authority to take action to stop the flow of public taxpayer money to such charter schools.

Schools for Scoundrels

The founder of what had been California's largest charter school chain, the California Charter Academy, has been charged with many counts of grand theft after a state audit (PDF) accused the school's operators of misappropriating at least $23 million. (The case is headed to trial next year.) The audit found that Steven Cox and another employee used school funds for personal benefit, including $18,000 for Jet Skis, $11,000 for Disney-related merchandise, $9,000 at the Disneyland Health Spa, and $42,000 to pay personal income taxes. Cox allegedly diverted more than $500,000 into other ventures, including a company called Xtreme Motor Sports; he spent more than $ 1 million hiring family members and giving them retroactive raises.

More from Mother Jones:

Last year, the principal of Chicago's Triumphant Charter School, Helen Hawkins, was sentenced to three years' probation for using the school's credit card to buy Louis Vuitton bags, hair care products, diet pills, and other items. Her daughter used the frequent-flier miles Hawkins had racked up for trips to Europe.

....Philadelphia, where 19 of the city's 84 charters are under investigation by federal authorities, is a particular hotbed of charter school fraud. In April, federal prosecutors indicted the CEO and board president of the New Media Technology Charter School, alleging the pair had stolen more than $500,000 in school funds and used the money on other business ventures, including a private school, a health food store, and a web design firm. At one point, according to prosecutors, they installed a marketing consultant for their health food store in a charter school office and paid him with school funds. Then there's the Philadelphia Academy Charter School, where founders solicited bribes and kickbacks from school vendors and submitted fake invoices to get reimbursed for meals, entertainment, and other personal bills. They proceeded to hire a contractor to help destroy computer records that might implicate them. The former CEO admitted to stealing roughly a half-million dollars from the school—in part by raiding school vending machines.

All of these events are in the public venue. How long can those in control of our nation's public schools allow this to go without stepping in?

[Egalitarian Thug]

1. K&R Everything is proceeding to plan.

[madfloridian]

39. Yep, with profits in mind, not students.

[Phlem]

2. Oops,

I didn't see that one coming.

-p

[jsr]

3. Recommend

[n2doc]

4. I'm sure Arne winces every time one of these crooks gets caught

It makes it that much harder to implement his plan.

[Jefferson23]

5. K&R

[Squinch]

6. Better yet, why don't we just go back to good old fashioned public education.

We're not better off now than we were before charter schools came along.

[liberal_at_heart]

16. We'd have to get politicians who are willing to increase funding and get rid of

Race to the Top and Common Core Curriculum. I'm not seeing any politicians in any of the parties willing to that as of yet.

[Squinch]

24. Isn't that amazing? If nothing else could make me a conspiracy theorist, that could.

[madfloridian]

25. They have turned education into a contest in which only corporations win.

And it turns the kids into test-taking machines.

[Starry Messenger]

7. Wonder where all the "charter schools are public schools" people are today?

[liberal_at_heart]

10. Well until Obama and Duncan repeal Race to the Top, Common Core, and the standardized

testing I'd like to see liberals take advantage of the charters. I'd like to see some liberal run charters. Charters that pay teachers what they are worth and give them a say in the curriculum, and accept all students including those with special needs and those that don't necessarily get the top test scores. It will be years before we grapple our schools away from those who want to make a profit from our education system and those politicians who support it ie Obama and other centrist democrats. I don't have time to wait. I have a son in special education who is being forced to take Common Core Curriculum. I would love to find an alternative for him.

[madfloridian]

11. Good question.

Very good question.

[QuestForSense]

22. Cashing in on corporately-run prisons and working diligently at privatizing the Post Office.

[sulphurdunn]

8. We now live in a country

where you could prove that charter schools were used to fatten kids for sale to cannibals at public expense and the only difference it would make is that Wall Street privateers would need to divert some of the money from the sale to bribe politicians and media outlets to praise the practice as necessary to make the meat a competitive lunch in the global economy.

[Enthusiast]

9. We need to consult Michele Rhee.

They need to throw someone in jail. A real someone. The kind of someone that can come out of jail with jail stories to tell.

[tclambert]

20. Would that be a privatized prison?

You know, one where they make a certain amount of profit per inmate and thus have a built-in incentive to keep the most harmless potheads locked up forever? Oh, and have an incentive to charge for empty cells they pretend have prisoners in them? And have an incentive to bribe judges to dole out the longest sentences possible? And, and, and . . .

My point, I think, is every privatization scheme seems to have built-in incentives for criminals to defraud the system. Just let's call these criminals entrepreneurs and it's all okey-dokey.

[Enthusiast]

30. As long as the prisoners are Charter school entrepreneur schemers I'm all good with it.

[Hissyspit]

12. Well, it's public school teachers' fault.

Can't possibly be anyone else's...

[madfloridian]

18. You didn't even need the sarcasm tag, hissyspit.

You hit the nail on the head.

[tclambert]

13. Wasn't that the purpose of charter schools?

To allow "entrepreneurs" to make fortunes in the education industry?

[madfloridian]

17. Exactly.

Education was a field that wasn't that profitable for corporations, at least not as much as they wanted. They called public schools a government monopoly...the propaganda worked well. Now they are taking over with the permission of both parties.

[El_Johns]

19. Yes. It's the goal of all privatization of government services.

[tclambert]

21. Yeah, I heard municipal fire departments came about because of corrupt insurance companies.

The insurance companies would pay for private fire brigades, who would cheerfully watch your place burn to the ground if you hadn't paid their protection fees, I mean premiums. Rumor had it they sometimes set fires to underscore how important their protection services were.

[RoccoR5955]

14. I am certain that this is happening

all over the country. I never was for these privatized schools. Just a way for more capitalists to siphon money from the commons.

[KoKo]

15. RECOMMEND!

[madfloridian]

31. Thanks KoKo

[SoapBox]

23. And what does that idiot Michelle What's-Her-Name have to say?

...just a fluke?

More plundering of tax dollars by the crooked and greedy.

[madfloridian]

28. Jersey Jazzman has a delightful post up about her and others like her. He spares no one. Link.

http://jerseyjazzman.blogspot.com/2013/12/michelle-rhee-is-really-bad-at-her-job.html

This is just a part of it:

Can we talk?

Michelle Rhee's book was a miserable commercial failure. The astroturfing of her group, StudentsFirst, is laughably transparent. She's managed to alienate large segments of the Democratic Party, her ostensible base. She has missed her stated fundraising goals by an embarrassingly wide margin. Her response to the Sandy Hook tragedy was achingly tone-deaf. Her silence in the face of the Washington test cheating scandal has been disturbing. The research StudentFirst puts out is cringe-inducingly inept. She can't get even the most basic facts about education research correct. She can't even answer a straight criticism from a student. She even chickened out of a debate with Diane Ravitch.

And now we find that the New York branch of her group can't even stage a rally without looking like a bunch of pre-scripted chumps.

Michelle Rhee is really, really bad at her job. One of these days, her funders might actually figure that out. What happens then?

- See more at: http://jerseyjazzman.blogspot.com/2013/12/michelle-rhee-is-really-bad-at-her-job.html#sthash.Iey1b1Ii.dpuf

[dem in texas]

26. When are taxpayers going to realize what a rip off charter schools are?

We had a charter school buy the land behind our house, about ten acres. The money for the land was furnished by taxpayers. They had a plan to build a large two story school with 700 students and 200 employees. Even though the land was not zoned for a school, they used taxpayer money to purchase the land. It was totally unsuitable for a school and my neighborhood was up in arms against them and the zoning department refused to change the zoning. Now the school is stuck with the land. This was about a year and half ago and the land has had a for sale ever since. Totally incompetent people who are wasting taxpayer's money while the public schools are getting their funding reduced.

We have an even worse charter school situation with Dion Sander's charter school, the Prime Prep Academy. The state has moved into to investigate money mishandling. Dion got into a fight at the board meeting and tried to choke a man. Dion was fired, then rehired, all fodder for the nightly news. Now the parents are complaining that the kids are not learning and the school is scoring at the bottom on the standard tests.

[madfloridian]

27. Wow Dion Sanders charter school...nuff said. Can't believe it is still open.

I had a whole of bunch about that, not sure if I ever wrote it up or not. Total incompetence...a good description of the power players behind the charter schools. The movement has little to do with students.....it is all about money and power.

My sympathies to your district...and I thought ours was bad. Best to you.

[madfloridian]

29. Wow. Pearson had to pay 7.7 mil in Common Core settlement. Misuse of "charitable assets"...

I guess this means Pearson pulled some tricks to get so many projects in the new Common Core products coming out. I guess that would fall under fraud or dishonest or just plain greed.

http://www.washingtonpost.com/local/education/pearson-pays-77-million-in-common-core-settlement/2013/12/13/77515bba-6423-11e3-aa81-e1dab1360323_story.html

Pearson Charitable Foundation, the nonprofit arm of educational publishing giant Pearson Inc., has agreed to pay a $7.7 million settlement to New York Attorney General Eric T. Schneiderman after he determined that the foundation had created Common Core products to generate “tens of millions of dollars” for its corporate sister.

“The law on this is clear: non-profit foundations cannot misuse charitable assets to benefit their affiliated for-profit corporations,” Schneiderman said in a statement Thursday.

The investigation by the attorney general examined Pearson’s efforts since 2010 to develop a line of classroom materials and tests built around the Common Core, new K-12 academic standards in reading and math that have been fully adopted by 45 states and the District of Columbia.

Pearson, the largest educational publisher in the world, sells instructional content, tests, systems and technology for profit to states, school districts and individual schools in the United States and across the globe.

They have turned all aspects of education into profit making machines....Pearson is really raking in the dough on the testing aspects.

[marmar]

32. My cousin teaches at a charter school and it could not be more obvious.....

...... Get as many kids as possible to show up on the official count day, and to hell with them the rest of the school year. They don't even require homework.
What is being done to children is criminal.

[a kennedy]

33. Seriously?? Didn't ANYONE see this coming.....

OMG. This is so typical..... no regulation, no oversight, and people wonder how this happens. Ugh.... and the students suffer worse for it.

[madfloridian]

34. Many saw it coming.

Some of us have posted about it for years now. Trouble is that since it is the policy of both parties it was not a popular topic here.

You are so right about the deregulation. In business and in education everyone suffers from it.

[sabrina 1]

35. 'No charges filed, but they are aware of the issue'. Well, why have no charges been filed if they

are aware of the issue? Why are we not reading about Criminal Charges?

Hooray for the Privatization of our Public School Funds!!

As if this could not have been predicted. And this is probably only the tip of the iceberg.

It's past time for Congress to step in here and end these failed policies. But I won't hold my breath.

[madfloridian]

36. To be aware and then do nothing...

is a crying shame.

[sabrina 1]

37. There has to be a reason, no? If someone steals a candy bar from a grocery store, action is taken.

To ignore this massive fraud is a crime in itself.

Thanks for keeping us informed, madfloridian, as always.

[madfloridian]

38. It is to Arne Duncan's shame that these scams continue.

He has had enough warning and heads up to what is happening. He and other reformers choose to ignore it.

I wonder how taxpayers can see what is happening and not rise up against such fraud?

[sabrina 1]

41. I think taxpayers are beginning to see what is going on, at least in small, local communities.

Eg, we are in a rural community and I was happy to see that parents and teachers have been demanding accountability from the local politicians on the entire testing system that has been imposed on their children. They have NOTICED the stress and the lack of progress and every meeting according to the local news, has been filled to capacity.

Unfortunately it takes a long time for people to finally see what is going on and so many children are adversely affected before it finally happens.

Arne Duncan was put there for a reason so he's most likely doing what his bosses want him to do. I doubt his job is in jeopardy at all, he has a done a good job, for the people he cares about.

[Egalitarian Thug]

40. The problem with laws is that they require someone to enforce them.

The Plutocracy will never prosecute the Plutocracy, ever.

I can't imagine a better way for a clinically depressed nation to commit suicide than the course we are on.