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California: Schools Tied to Massive Online Charter Scandal Are Closing

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Will Huntsberry of the Voice of San Diego reports that all the online charters connected to the biggest charter fraud in U.S. history will close.

Huntsberry writes:

An online charter school empire whose leaders have been charged with enrolling fake students and misappropriating $80 million in public funds will be forced to close all of its schools across California.

In May, the San Diego district attorney’s office charged 11 people in a corruption scandal of historic proportions. Prosecutors say Sean McManus and Jason Schrock, who operated A3 Education, were the ringleaders of the operation. Several who worked with McManus and Schrock have also been charged with crimes, including the superintendent of the Dehesa School District in San Diego County.

At its peak, A3 operated 19 online schools across the state, including three in San Diego, according to investigators. One closed before the charges were filed. And two more – one in San Diego and another in Los Angeles – were slated to close. But now a court-appointed receiver has decided to shutter all of the remaining schools.

Students’ records at each of the closing schools will be transferred to their school district of residence by Sept. 30, according to a letter obtained by the Marin Independent Journal, which was sent out to districts associated with the A3 schools. Richard Kipperman, the court-appointed receiver, confirmed to Voice of San Diego that all the schools will close.

How the Scam Worked

Prosecutors painted an intricate picture of a complex organization that managed to turn student records into giant sums of cash. A3 Education enrolled many students who took actual classes, but it also enrolled many students who never did any schoolwork, prosecutors say.

Most of the fake students were participants in summer athletic programs, according to the indictment. Enrollment workers would approach a football program, for instance, and offer as little as $25 a head for each player’s records. The enrollment worker would also get a commission on however many students he or she enrolled. The rest of the money – which totaled in the thousands of dollars for each student – went to companies controlled by McManus and Schrock.

In one instance, Luiz Rigney, an enrollment worker, carried several suitcases of student paperwork, worth roughly $5 million, to one of A3’s offices. Rigney had been asked to backdate that paperwork so A3 could get maximum profit, prosecutors say.

In another instance, two workers texted each other back and forth about the large sums of cash flowing through the company: “I had the weirdest dream last night! One was about us growing all Sean’s schools. I was running all the Facebook campaigns and you were running around my office drinking champagne throwing money everywhere yelling I love bonuses,” the texts read, according to court documents.

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