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San Diego County collects millions in fines from charter school fraud

San Diego County seal money
Posted at 1:07 PM, Jun 01, 2022
and last updated 2022-06-01 16:07:38-04

SAN DIEGO (CNS) - More than $37 million in fines has been paid to San Diego County as part of a court judgment stemming from a charter school fraud scheme that took millions in public school funds and led to criminal charges against 11 people, the San Diego County District Attorney's Office announced Wednesday.

The total fine amount includes $18.75 million recently paid by Sean McManus, CEO and president of A3 Education, who pleaded guilty to stealing more than $50 million in public funds and was sentenced to four years in prison.

Prosecutors say McManus and co-defendant Jason Schrock directed subordinates to open up 19 "A3 charter schools" in San Diego County and elsewhere across the state, and collected state funds by alleging students were enrolled in programs run by the schools.

The District Attorney's Office, which called the case "one of the nation's largest fraud schemes targeting taxpayer dollars intended for primary education," said the men paid for student information and used the info to enroll children in summer school programs at their online campuses. Prosecutors say some parents were unaware their children were enrolled in a charter school at all.

The defendants then took measures to inflate the amount of money the state paid the charter schools by falsifying documentation, which included backdating documents to indicate that students were enrolled in the charter schools for longer than they were or switching students between different A3 schools to increase funding per student or per school beyond legal limits, prosecutors said.

The schools earned as much as $4,000 per student despite not providing full educational services, with the defendants transferring millions of those funds to private companies they owned, according to the DA's Office.

McManus, Schrock and nine others were indicted in 2019 and have since pleaded guilty.

Along with fines, $14 million in restitution has been paid to victims in kindergarten through 12th grade, which is being held in trust and administered by the San Diego Foundation. Up to $90 million in additional restitution will go to the state.

Fines imposed in connection with the case will be earmarked for programs "that directly serve the needs of kindergarten through 12th grade students in San Diego County," the DA's Office said, citing a resolution passed by the San Diego County Board of Supervisors.

A grant program has also been established, which will provide funds recovered in the case to community-based organizations looking to establish or expand programs aimed at improving educational outcomes and reducing inequities and disparities for youth.

Proposals for the K-12 Youth Services Community Grant must focus on one or more of the following areas:

-- educational equity/acceleration of learning;

-- behavioral health needs;

-- housing, food stability, poverty;

-- mentorship.

Organizations interested in applying for a K-12 Youth Services Community Grant must apply by 5 p.m. Friday. Grants are expected to range from $50,000 to $250,000 to be utilized for up to a 12-month period. Additional information is available at program.html.