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

Grand Jury Indictment photo
San Diego District Attorney Summer Stephan is flanked May 29 by her team of prosecutors and investigators for what they say was a statewide charter school scheme that used more than $50 million in public funds. (Nelvin C. Cepeda/San Diego Union-Tribune/AP)

By Valerie Strauss | The Washington Post

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.

A task force headed by California State Superintendent of Public Instruction Tony Thurmond just completed a report that was sent to Gov. Gavin Newsom (D) with recommendations on how to tighten California’s charter school laws. The report includes measures that would give local school districts more say over where and whether charter schools can open.

This story was first published by Voice of San Diego, which is a member-based nonprofit investigative news organization. It gave me permission to republish this piece, written by Will Huntsberry, a reporter at Voice of San Diego who writes about education, schools and children.

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