“When Harris and Chaney and Brock created this complex scheme, which is the linking of nonprofits with for-profits to make money, it looks very similar to what was done in Oklahoma.”īyrd, who is running for reelection in the primary election on Tuesday, said she had expressed concerns publicly and privately about Epic’s business practices under its founders and former CFO. “Epic Youth Services received thousands of dollars in consulting fees for Oxford Prep from 2013 to 2016,” Byrd said. The exact amount won’t be known until the Internal Revenue Service completes its own investigation.īyrd, in a press conference at the Capitol, said Epic used a similar management and business structure to conceal expenses at its California school, Oxford Prep, as it did in Oklahoma. State Auditor and Inspector Cindy Byrd, whose office helped with the criminal investigation after several audits, said more than $55 million in public funds could have gone to the founders.
Capital Gains, a lobbying firm run by Robert Stem, a longtime friend of Harris’, was paid more than $500,000. More than 50 times, Chaney, Harris and Brock transferred public funds from the learning fund account to the private bank account for Epic Youth Services, which was then used to pay a lobbying firm. The account received nearly $145 million between 20. Instead, they request a purchase from Epic and the school transfers the money to Epic Youth Services, which pays the vendor.Ĭhaney and Harris used a separate bank account to make learning fund purchases, and investigators found Chaney and Harris didn’t return unused learning fund dollars. Parents don’t receive the money directly. Parents can allocate those dollars for curriculum, laptops and extracurricular activities. For the learning fund, Epic makes at least $1,000 available to each student annually in a virtual account. One of the school’s largest recruitment tools, the learning fund, was used to conceal illegal purchases, agents alleged.
The charges involve co-mingling of funds, excessive and unnecessary management fees, use of Oklahoma tax dollars in California, political influence, concealment of profits, submission of false invoices and the illegal use of employees. The scheme has cost the state more than $22 million, according to the OSBI.
Investigators said the men ran a complicated criminal enterprise using the online charter school and a for-profit company, Epic Youth Services. Each is charged with racketeering, embezzlement, obtaining money by false pretense, conspiracy to commit a felony, violating the Oklahoma Computer Crimes Act, submitting false documents to the state and unlawful proceeds. Epic Charter Schools’ founders, who were arrested Thursday, shifted millions of school dollars to company credit cards, which were used to make political campaign donations, fund a lobbyist and pay personal expenses like vacations, the Oklahoma State Bureau of Investigation alleges in court documents.įollowing a yearslong investigation into alleged embezzlement of taxpayer funds, the co-founders of the state’s largest online school were arrested Thursday, along with the longtime chief financial officer, court records show.ĭavid Chaney, 43, Ben Harris, 46, and Josh Brock, 40, were booked into the Oklahoma County Detention Center Thursday morning.
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