Charter Fraud Investigation Spreads

money-40603_1280Criminal charges of grand theft, money laundering, fraud and aggravated white collar crime hit four Escambia and Pinellas charter schools.  Now even more are involved in Duval.  Why?

 

 

 

 

It appears that the charter management company, Newpoint, has related companies with which it does business.  These may be ‘on paper only’ companies.  The members of the companies have ties to each other.   Some have exactly the same address in Ohio.  It is a profitable strategy for them.  Maybe it is a virus.  Ohio has had multiple charter scandals. This year nineteen more Ohio charters are under federal investigation.

Four Newpoint charters closed in Escambia.  Three are on 90 day notice in Pinellas.  Now, two more are under investigation in Jacksonville.  Senator Brandes vowed to help keep the Pinellas charter schools open and find another management company.  The Pinellas charter board members are leary.  They may decide to manage the schools themselves.  Without appropriate state regulation and transparency, however, even well intentioned charter boards have difficulty exercising their oversight responsibilities.

Charter management companies tend to create subsidiary companies.  The web of companies is difficult to identify because they are privately owned and not subject to ordinary public records scrutiny.  Thus, it may take a subpoena to find out where the money is going.  Even though most management companies control about 95% of charter school funds, all the board may know is that the money is gone.

If you want to get a glimpse into how complicated these business arrangements are, read the article in the Jacksonville’s Florida Times Union.  Some of the money comes from federal grants to start up new charters; some comes from state operating funds supplied to charters by the legislature.

There are ways to curb this abuse.  Occasionally the laws are tweeked.  In the last legislative session, charter proposers were subjected to background checks.  Much more must be done to curb abuse.  Thus far, too many Florida’s legislators claim that regulation harms innovation.  This kind of innovation the citizens of Florida do not need.

 

 

Posted in Audits, Charter School Management, Charter Schools, Florida, Funding, Lawsuits, Ohio, Uncategorized.

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