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Mon Jun 17, 2019, 03:04 PM

How does a $50 million charter scam work? Here's what happened in California (before 11 people were

Original report: Inside the Charter School Empire Prosecutors Say Scammed California for $80M (Voice of San Diego)

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Source: Washington Post

How does a $50 million charter scam work? Here’s what happened in California (before 11 people were indicted).

By Valerie Strauss
June 17 at 11:41 AM

Late last month, San Diego officials indicted 11 people in what they described as a charter scam that defrauded the state of California of more than $50 million in education funds.

The indictment details a scheme in which an Australian man and his business partner in Southern California opened 19 charter schools throughout the state and then took the public funding the schools received to operate and used it instead for real estate and other ventures.

This post explains the scam that the 235-page indictment spells out in detail. This is long but worth the time to read to get an understanding of how easy it is, because of lax charter sector laws in some states, to defraud the public.

California, which has more charter schools and more charter school students than any other state, now has one of the most lax charter laws in the country, allowing these schools to operate with little if any accountability or transparency to the public.

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Read more: https://www.washingtonpost.com/education/2019/06/17/how-does-million-charter-scam-work-heres-what-happened-california-before-people-were-indicted

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District Attorney Summer Stephan discusses the indictment of several people tied to an alleged scam involving the charter school management company A3. / Image courtesy of NBC San Diego

Source: Voice of San Diego

Inside the Charter School Empire Prosecutors Say Scammed California for $80M

The indictment against the leaders of A3 Education lays out a complex organizational structure with two top leaders and several lieutenants who led the charge to enroll thousands of summer school students, who did not actually take classes. Several superintendents, knowingly or not, helped fuel the network’s growth. And untold coaches, students and parents were roped in to help boost enrollment.

Will Huntsberry
June 12, 2019

Sean McManus and Jason Schrock created an online charter school empire that covered more than half the state of California, according to prosecutors and investigators for an outside charter school organization.

From the port of entry at San Ysidro up to Los Angeles, past the cliffs of Big Sur all the way to Santa Cruz; east through Raisin City, past the giant sequoias of Sierra National Forest, and down into the flat and quiet of Death Valley; south again to the Mexican border; and back to the coast – a person could travel unbroken through 20 counties that made up the lower half of their empire. An outpost of 14 counties encompassing Sonoma and Sacramento sits further north.

From this vast swath of territory, McManus and Schrock absorbed mind-blowing profits. Take just some of their 2016 tax returns: Their nonprofit charter management company A3 brought in $14.2 million in revenue. It spent only $3.6 million. Of the money it spent, $855,796 went to McManus and Schrock’s salaries. They appeared to be the only two employees, according to the tax return.

The profits climbed even higher in the months that followed, according to an indictment filed by prosecutors. A3 Education and other companies controlled by McManus and Schrock ultimately brought in more than $80 million, prosecutors say.

Nothing in the law stops a nonprofit charter management company from operating on wide profit margins or paying its officers hundreds of thousands of dollars a year. But the company’s “profits” aren’t ever supposed to make it into personal bank accounts. To get them there requires shady accounting. Prosecutors say McManus and Schrock extracted roughly $8 million into bank accounts and personal charities and bought a $1.6 million house for joint use in San Juan Capistrano.

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Read more: https://www.voiceofsandiego.org/topics/education/inside-the-charter-school-empire-prosecutors-say-scammed-california-for-80m/

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Reply How does a $50 million charter scam work? Here's what happened in California (before 11 people were (Original post)
Eugene Jun 2019 OP
SWBTATTReg Jun 2019 #1
mr_lebowski Jun 2019 #2
Me. Jun 2019 #3
TygrBright Jun 2019 #4
Ernesto Jun 2019 #5

Response to Eugene (Original post)

Mon Jun 17, 2019, 03:14 PM

1. Wow. We've slowed down the implementation of charter schools in MO...I don't know if was due ...

to similar issues such as the orig. posting but wow...wasn't someone watching?

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Response to Eugene (Original post)

Mon Jun 17, 2019, 03:14 PM

2. Gotta love the Privatization/Private Sector worship! Wonder what Pols they bribed with their

ill-gotten gains?

SMDH this could be allowed to go on to this extent before someone caught them ...

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Response to Eugene (Original post)

Mon Jun 17, 2019, 03:22 PM

3. Calling Sevretary De Voss

do your job!

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Response to Eugene (Original post)

Mon Jun 17, 2019, 03:38 PM

4. Ahh, the vaunted "private sector". At it again, showing its superiority... n/t

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Response to Eugene (Original post)

Mon Jun 17, 2019, 04:05 PM

5. I taught Sheet Metal Workers apprenticeship classes for 12 years

Upon retiring I got offered a job teaching @ a high school in Stockton Ca. They offered me 12 bucks an hour.... At my last job @ American River College in Sacramento, I was paid more like $25 an hour.
And, I also was to be required to work a month for free in the summer in preparation for the fall semester.
Upon declining their offer, I discovered that this was indeed a "CHARTER SCHOOL" .

Nuf said?

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