Tulsa Charter Leaders Charged with Massive Fraud
The founders of Epic Charter School were charged in a charter school scheme that defrauded Oklahoma’s largest school system out of tens of millions of taxpayer dollars by enrolling ghost students, falsifying invoices, and using credit cards paid for with school funds to cover personal and out-of-state charter school expenses, the Tulsa World reported. The charges came after an investigative audit in October of 2020 by the state auditor and inspector initiated a years-long probe by the Oklahoma State Bureau of Investigation.
Epic Charter Schools founders David Chaney and Ben Harris, along with several other co-conspirators, were charged with embezzling $14 million in state funds by falsifying invoices to justify payments to Epic Youth Services, a for-profit management company headed by the same pair. Another $3.3 million in illegal transfers were made to the same company from the charter schools’ Student Learning Fund, according to the Tulsa World.
The former CFO for both Epic Charter Schools and Epic Youth Services, Josh Brock, is accused of issuing himself illegal overpayments totaling $1.1 million directly from Epic’s Student Learning Fund, as reimbursements for purchases made on his personal credit card. Over $350,000 in public funds was illegally paid to Chaney to reimburse payments on a personal credit card. Plus, over $550,000 in purchases were made on Chaney’ credit card during 2021 to cover the cost of opening another arm of Epic in California, reimbursed with Oklahoma tax dollars, reported the Tulsa World.
Oklahoma law prohibits for-profit charter schools. Epic’s charter network was accordingly established as a non-profit entity. However, the law does not stop charter schools from engaging with for-profit vendors. Chaney and Harris to that end established the for-profit Epic Youth Services (EYS) to secure a percentage of every dollar of the school’s state and federal funding for themselves, according to the Tulsa World.
Though Oklahoma law limits public schools to spending no more than 5 percent of their taxpayer funding on administrative costs, EYS was taking a 10 percent cut: it received more than $69.3 million in fees to manage Epic since 2013, with Harris reportedly receiving $24.8 million, Cheney $23.2 million, and Brock $7.1 million, the Tulsa World reported. That means that only $14.2 million was left for the management of the Epic network between 2013 and 2021.
The leaders of Epic Charter Schools are also charged with heading a pyramid scheme meant to boost enrollment and garner more state funds by signing up students in private schools as well as home-schooled students who were not actually engaged as full-time students. Some parents, in fact, had no idea their children were enrolled in Epic at all, according to the Tulsa World.
- A. Thomas