67-count Calif. indictment charges charter operators

California prosecutors said in May that an Australian man and his partner in Long Beach fleeced the state’s taxpayers out of more than $50 million through deceptive business practices and their in-depth knowledge of California education funding and charter school regulations, the San Diego Union-Tribune reported.

A closer look at the indictment reveals many deceptive education practices, not just deceptive business practices, involving “A3 Education,” operated by Sean McManus and his partners.

“Conspirators knowingly collected public funds for large amounts of students for “summer school” through a multitrack attendance calendar, claiming Track A, started on July 1 and ended 175 days later, but in reality Conspirators openly advertised and intentionally enrolled students in school for 40 days only, and claimed to the State that students all voluntarily withdrew before 175 days. To increase profit from Track A enrollments, Conspirators did not assign teachers to Track A at lawful teacher to student ratios.

“Conspirators also enrolled children for Track A from pre-existing youth programs such as sports teams, camps, gyms, private schools both religious and secular, and private enrichment centers. Conspirators paid pre-existing youth programs for student report cards and enrollment documentation and used the documentation as the basis to enroll students in public charter schools. Conspirators provided limited to no services to the pre-existing programs and did not assign teachers at lawful pupil to teacher ratios. Conspirators paid the pre-existing youth programs a fraction of what was received in public funds from the state for 40 days of enrollment.

“Conspirators also operated an online and homeschool program that operated both during the regular school year and over the summer. Conspirators knowingly obtained additional ADA funding for full year students over summer, by un-enrolling them in their charter school, and enrolling them in a separate “sister” charter school without the student’s or parent’s knowledge. …”

Mr McManus and his associates at A3 Education were charged specifically with generating public funds from charter schools under their control and misappropriating those funds by transferring them to private companies they owned and/or operated, primarily real estate companies. They allegedly did this under cover of providing educational and instructional services when no such services were provided by those companies.

A3 Education is believed to have courted small school districts throughout the state, districts that were suffering from financial difficulties, and suggesting that they authorize a charter school in order to generate more state funding for the district.

That is, of course, how charter school laws work, because districts need to get more funds in order to oversee the charter schools they’re authorizing. But if no educational services are actually provided by the vendors and contractors those charter schools pay, this practice comes down to fraud and deception.

Not all districts fell for the scam. In January 2013, the San Bernardino Unified School District rejected a charter proposal from Mr McManus’s shell company, according to documentation posted on the district’s website.

Editorial

As news agencies have reported, many students have been served well by charter schools. The charter school idea and ideal have definite roles to play in America’s educational landscape.

But current laws in many states are too lax and allow for the kind of corruption alleged in the California A3 indictment. Until this corruption ends—and it’s not like public schools and their contractors don’t fleece taxpayers out of money that doesn’t serve a single educational need—charter schools will continue to be frowned upon by education and child advocates.

About the Author

Paul Katula
Paul Katula is the executive editor of the Voxitatis Research Foundation, which publishes this blog. For more information, see the About page.

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