Epic Charter Schools paid co-founder's personal credit card charges, forensic auditor testifies
State auditor details findings of $375,000 in personal credit card charges by one Epic Charter Schools co-founder paid with school funds. #oklaed A forensic auditor for the state testified that Epic Charter Schools' student Learning Fund was used to pay over $375,000 in personal credit card charges by one of the school's co-founders, David Chaney, who received at least $23 million from the school. The case against Epic Charter School’s co-founder, Ben Harris, and longtime CFO Josh Brock is being prosecuted under the Racketeer-Influenced and Corrupt Organizations (RICO) Act, alleging 15 counts including embezzlement, money laundering, computer crimes, and conspiracy to defraud the state. Brenda Holt, director of forensic audits for the State Auditor and Inspector, testified that $817,000 of the personal expenses of Chaney added up $800,000, but $377,000 was paid from the Epic student Living Fund. The personal expenses included charges at the clothing store Men's Warehouse, StubHub ticket exchange and resale company, Southwest Airlines, Starbucks, AT&T, Uber, and political campaign donations to former State Superintendent and gubernatorial candidate Joy Hofmeister. Holt also testified that under the costs of an Epic-affiliated charter school in California improperly bearing administrative costs of $2 million had been paid by state employees.
公開済み : 一ヶ月前 沿って andrea eger, Andrea Eger Tulsa World の
OKLAHOMA CITY — A forensic auditor for the state testified Thursday that Epic Charter Schools’ student Learning Fund was used to pay more than $375,000 in personal credit card charges by one of the school’s co-founders who received at least $23 million from the school.
During the fourth day of the preliminary hearing in the massive racketeering and embezzlement case against Epic Charter Schools’ co-founders David Chaney, 44, and Ben Harris, 48, and longtime CFO Josh Brock, 42, the director of forensic audits for the office of the State Auditor and Inspector said she and her team analyzed credit card statements for two personal credit cards used for all purchases for the school’s student learning needs.
Brenda Holt said credit card purchases identified by Epic’s own attorneys as the personal expenses of David Chaney added up $817,000, but $377,000 of that was paid from the Epic student Learning Fund rather than Chaney himself.
The personal expenses included charges at the clothing store Men’s Warehouse, StubHub ticket exchange and resale company, Southwest Airlines, Starbucks, AT&T, Uber, and political campaign donations to former State Superintendent and gubernatorial candidate Joy Hofmeister.
Chaney, Harris and Brock were arrested and charged in June 2022 in Oklahoma County District Court under the Oklahoma Racketeer-Influenced and Corrupt Organizations, or RICO, Act.
The criminal case, now being prosecuted by the Oklahoma Attorney General’s Office, alleges 15 counts, including embezzlement, money laundering, computer crimes and conspiracy to defraud the state.
Yet to testify is Brock, who has already waived his right to a preliminary hearing and his formal arraignment is set for April 3. His attorneys have told the Tulsa World he is expected to testify in hopes of obtaining a plea deal with prosecutors that would result in him receiving a sentence of probation only.
All week, Chaney and Harris’ defense attorneys have contended much of the taxpayer monies their clients are accused of misappropriating had actually become “private funds” once they were received into the bank account of Chaney and Harris’ private management company, Epic Youth Services.
But state law enforcement contends Epic’s student Learning Fund was Oklahoma taxpayer funding intended only for the education of public school students enrolled in Epic Charter Schools in Oklahoma.
Holt said she and her team zeroed in on the student Learning Fund in their year-long process of conducting a forensic audit on Epic because of multiple questions and concerns they encountered.
But she said Epic resisted all State Auditor and Inspector’s Office requests to review the student Learning Fund. In October or November 2019, she said, Harris asked auditors to meet with him and his attorneys.
At that meeting, Holt said Harris told her: “My review of that would impose on his business model and some other discussion was made. We wanted to inquire about the number of employees EYS had and how they managed the Learning Fund. Mr. Harris would not give us that answer. He told us: 'If we told you how many employees we have, the Legislature would bludgeon us about our fees.’
“Another statement Mr. Harris made was, 'Something you will find is EYS has not ever profited from the Learning Fund,’ and they have taken no payments from the Learning Fund.”
Holt said her team later discovered EYS, which was receiving 10% of all state and federal revenue to the school as compensation, had only three people — Chaney, Harris and Brock — managing the school, and that seemed insufficient.
“They were to manage and administer the school,” Holt said, referring to EYS. “We determined that the Learning Fund was a process of purchasing and handling student transactions, purchasing curriculum. We became concerned the school was hiring the employees to handle the Learning Fund. The contract was for EYS to manage the school, manage the Learning Fund. Why are state employees doing that with state computers, state facilities? So that became a concern.”
Holt also testified that under EYS’ management, Epic’s charter school in Oklahoma was improperly bearing the costs of administrative duties EYS was contracted and compensated to carry out, as well as improperly bearing the administrative costs of an Epic-affiliated charter school in California with Oklahoma taxpayer-funded school employees.
“All salaries and benefits were paid by the state of Oklahoma and they were members of the Oklahoma Teachers Retirement System — it’s further proof that they are full state employees,” Holt said. “We determined that $2 million had been paid by the state of Oklahoma to manage the Learning Fund.”
Investigations by state education officials and authorizers of Oklahoma’s largest charter school system were prompted by a host of allegations forwarded to them directly by Epic school board member Kathren Stehno.
Contacted by the Tulsa World, Stehno said she came to believe she had been given false, partial or misleading information by Paul Campbell, Epic’s board chairman, and Superintendent Bart Banfield in recent months to influence her decision-making as a board member.
Then, she said, she was approached recently by multiple “whistleblowers” from within Epic’s ranks of employees with allegations that Epic leaders had doled out high-dollar bonuses to a handful of top administrators without school board authorization and violated state law and school policy in the way it withdrew “a high percentage” of its students for truancy.