Accountability California Corruption Education Industry Fraud Virtual Charter Schools

California: Charter Operators Will Repay the State at Least $215 Million

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Will Huntsberry of Voice of San Diego writes here about one of the biggest scams in the history of charter schools (the biggest was probably the ECOT–Electronic Classroom of Tomorrow–scandal in Ohio, which cost the state about $500 million).

The two ringleaders of an online charter school scam that raked in hundreds of millions of dollars in taxpayer money pleaded guilty to conspiracy charges on Friday. 

Sean McManus and Jason Schrock, as well as nine other defendants, including a superintendent, were charged back in 2019 as part of a complicated scheme that involved enrolling fake students into their online charter schools and collecting public money for each student...

“The general activity is you and your friend got these millions of dollars from the state and you funneled them into your pocket, correct?” asked San Diego Superior Court Judge Frederick Link, while taking the pleas. 

Both answered yes. 

Online charter schools are allowed to collect just as much money per student as brick-and-mortar schools. But the case has pushed legislators in Sacramento to re-examine the rules surrounding online charters. Lawmakers passed a two-year moratorium on the creation of new online charters and are considering changes to the state’s enrollment and funding practices. 

Over a several-year period leading up to 2019, McManus and Schrock’s schools brought in roughly $400 million in revenue, prosecutors from the San Diego District Attorney’s Office have said. 

As part of McManus and Schrock’s plea deal, they have agreed to turn over all remaining cash and assets owned by A3 and its subsidiary companies. So far, that includes at least $215 million that will eventually make its way back into state coffers. 

A3 may have misappropriated more than $215 million but that was all the cash and assets they had.

The next time someone insists that “charter schools are public schools,” ask them when was the last time that they heard of a public school stealing $215 million from the state.

A CREDO report in 2015 found that going to an online virtual charter was equivalent to a full year’s of lost time in mathematics, and almost half a year in reading. Yet numerous states are now considering legislating that would fund the child in any kind of school–charter, religious, for-profit, virtual, home schooling, Uncle Jed’s barn, whatever they want. We are rapidly advancing backwards to the 19th century.

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