Adelaide L. Sanford Charter School

“With Adelaide L. Sanford Charter School closing, Newark families must move on.” The Star-Ledger (NJ), 6/25/2013

NEWARK — Bobby and Troy Shanks saw the handwriting on the wall last year with the Adelaide L. Sanford Charter School in Newark when federal officials filed a lawsuit against the school...

The embattled charter school, opened in 2007 by longtime activist Fredrica Bey, had been on probation for more than a year. The school is also facing a complaint by the U.S. Attorney’s office which contends Bey took $345,325 in federal grant money earmarked for programs to keep "at-risk" youths off of the streets and instead used it used it to pay bills for the Women In Support of the Million Man March, a non-profit community group she started in 1995.

The state also expressed concerns about the conflicts of interest between the school’s leadership and the school’s agreement to lease space from WISOMMM...

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“Special report: Born in hope, Newarkcharter school now embroiled in controversy.” The Star-Ledger (NJ), 5/5/2013

NEWARK — Linda Newton enrolled her 8-year-old son at Adelaide L. Sanford Charter School to shield him from the ills that afflict many of Newark’s regular public schools.

She has regretted that decision every day since.

Last summer, nearly all of the troubled school’s two dozen teachers resigned, and students were hastily relocated to a downtown building that parents say is not equipped for their children. Some students climb five flights of stairs to reach their classrooms in the hulking former church.

Other kids have no classrooms at all, sharing space in a vast multipurpose room where academic instruction is often interrupted by the clapping and stomping of a dance class some 50 feet away.

Parents and teachers complain of a shortage of textbooks, an insufficient heating system and a lack of discipline for rowdy students, leading to fights and bullying.

At least half of the 339 kids enrolled on the first day of school have left, though some have been replaced with new recruits, the parents and teachers said. Test scores are among the bottom 10 percent in the state...

But a Star-Ledger examination of the school and its leadership reveals a faltering institution that provides bare-bones learning facilities while using millions of dollars in state and federal aid, bolstering a real estate fiefdom controlled by the school’s founder, Fredrica Bey.

A fiery community activist with political pull, Bey has come under intense scrutiny by both the state Department of Education and the U.S. Justice Department, which accuses her of fraud in a civil suit. That case, unrelated to Adelaide Sanford, is expected to come to trial later this year, barring a last-minute settlement.

The Star-Ledger review found that school officials — including Bey’s daughter and longtime friends — approved hugely inflated rental payments to Women in Support of the Million Man March, a community group Bey founded, for space the school doesn’t use. An attorney who specializes in nonprofit law said the arrangement smacks of a "sham transaction."

At the same time, investigators with the state Education Department determined Bey may have broken the law by using a possibly invalid school lease as the bedrock document to obtain an $8.27 million loan. The investigators recommended that the Division of Criminal Justice look into the matter.

The newspaper’s examination — encompassing court records, Education Department reports, financial documents and dozens of interviews — also found a pattern of recalcitrance by Bey and school officials, who repeatedly ignored state directives, according to documents obtained under the Open Public Records Act.

In particular, the state has accused Adelaide Sanford for more than a year of refusing to comply with regulations, turn over records or eliminate clear conflicts of interest, chiefly the dual roles Bey held as executive director of both the school and her group, known in the community by its acronym, WISOMMM...

Revered by some and feared by others, Bey, 68, has built a reputation as a powerful figure in New Jersey’s largest city, with friends in political, cultural and activist circles, along with a direct line to Nation of Islam leader Louis Farrakhan.

But she has also periodically drawn scrutiny from law enforcement officials investigating allegations of fraud. Most recently, the U.S. Attorney’s Office last year sued Bey and WISOMMM, alleging violations of the False Claims Act...

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Atlanta Preparatory Academy

“Atlanta school board considers own police force.” Atlanta Journal-Constitution (GA), 1/14/2013

“... The board on Monday also decided the fate of Atlanta Preparatory Academy, voting 8-1 (Byron Amos dissenting) to follow Davis’ recommendation not to renew the charter of the school. APS executive director of innovation Allen Mueller told the board the school has underperformed academically and has financial problems.

According to Mueller, the K-8 school with about 450 students ranks in the bottom 20 percent of schools statewide in academic performance; its enrollment is 45 percent lower than originally projected; and it owes $801,384 to for-profit education management company Mosaica Education, Inc.

Atlanta Prep board members and Mosaica co-founder and president Gene Eidelman said afterward the school will take its case to the state charter commission, which was approved by voters last November in part to consider charter proposals rejected by local school boards...”

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“Atlanta school facing loss of charter.” Atlanta-Journal Constitution (GA), 1/2/2013

The Atlanta school board will hear arguments in January whether to renew the charter of Atlanta Preparatory Academy or follow a staff recommendation to terminate it in June...

The dispute over renewal illustrates the dynamics and nuances of charter school relationships with local school boards, especially charters run by for-profit management companies that collect taxpayer funds from the district and extract hundreds of thousands of dollars in management fees.

Allen Mueller, APS’s executive director of innovation, told the board Dec. 3 the case against Atlanta Prep’s renewal is clear-cut and the school’s failings manifold. Atlanta Prep ranks in the bottom 20 percent of schools statewide in academic performance; its enrollment is 45 percent lower than originally projected; and it owes $801,384 to for-profit education management company, Mosaica Education, Inc., he said.

Mosaica has agreed to restructure the loan to eliminate a $568,000 balloon payment due in June, said Mueller. But the financial arrangement is still “untenable” because it’s a potential threat to the autonomy of the board, he said. The state of Georgia recommends charter boards have the independence to overrule their management companies...

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“Charter Founder Profits; Students Struggle.” East Atlanta Patch (GA), 12/11/2012

...In December 2006, Mosaica’s President Gene Eidelman filed a charter petition to open the Atlanta Preparatory Academy (APA).  The charter application indicates that non-profit APA intended to contract with for-profit Mosaica to provide all services.

Unlike Grant Park’s community-based Atlanta Neighborhood Charter School, APA was not founded by a group of local parents seeking better options for their kids. Instead, Gene Eidelman was joined by a team of three outsiders, none of whom live in the community where APA planned to operate its school and none of whom send children to the school...

The application acknowledged a conflict of interest as APA’s President was also the founder, owner, and President of Mosaica.

Undeterred by this conflict, the APS Board of Education approved the application...

Since the Board of Education approved the school’s charter five years ago, APA has been a revolving door for board members who join then leave the organization... None of the individuals who have served as CFO appear to have earned a degree in finance or accounting...

This instability and lack of financial experience stands in stark contrast to the consistent financial leadership seen at Atlanta’s successful charters...

Much like Mosaica’s other schools, APA’s students rank among the bottom of the pack on Georgia exams...

Importantly, the school’s highest performing students are 7th graders who received their K-4 educations elsewhere, prior to APA opening...

In addition to the charter’s dismal academic achievement, a review of APA’s financial statements raises questions about whether the school has been a good steward of public resources...

The Management Agreement between APA and Mosaica calls for a fee of 12.5% of per-pupil revenue received by the school, which in 2012 amounted to $577,716. It goes on to say that this fee “will not preclude the payment of additional consideration,” paving the way for Mosaica to charge more for any services not covered under the Management Agreement...

Only 36.2% of APA’s revenue for the year ended June 30, 2012 actually went toward instruction. This was the lowest percentage of expenses allocated to instruction among all of Atlanta’s charter schools...

To date, APA has spent close to one million dollars of public money on a site which in no way contributed to education...

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Cleveland Academy of Scholarship Technology & Leadership Enterprise (CASTLE)

“South Euclid man indicted on money laundering charges involving Cleveland charter school.” The News-Herald (OH), 8/11/2013

Ten people, including a South Euclid man, from 13 companies were indicted Tuesday on multiple charges relating to the operation of a Cleveland charter high school.

Cuyahoga County Prosecutor Timothy J. McGinty said the 32-count indictment included charges of engaging in a pattern of corrupt activity, conspiracy to engage in a pattern of corrupt activity, theft by deception, money laundering and unlawful interest in a public contract.

Between July 2004 and June 2010, payments made to 13 "shell companies" affiliated with board members of the Cleveland Academy of Scholarship, Technology and Leadership Enterprise were not documented and the state auditor issued findings for recovery of $1,850,489, according to the indictment...

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“Charter school officials accused of stealing nearly $2 million.” The Plain Dealer (OH), 4/30/2013

CLEVELAND, Ohio -- Five former officials of the Cleveland Academy of Scholarship Technology & Leadership Enterpriseare among 10 people and 13 businesses accused of fleecing the taxpayer-supported charter school out of nearly $2 million.

A 32-count indictment issued Tuesday accuses the former officials of setting up shell companies to receive payments from the school for goods and services that were never provided...

Among those charged were the school's former chief executive, William Peterson, 43, of Dayton, and the former board chairman, Thomas Unik III, 52, of Cleveland.

Peterson used five shell companies, with names such as Educational Management Alliance and Cross Tech EduServe, to steal $858,000 from the school, according to prosecutors.

Unik, who is part-owner of the building that houses the school at the corner of East 18th Street and Superior Avenue in Cleveland, received $478,785 in excess of the amount dictated by the school's lease, according to prosecutors.

The charges followed a State Auditor's Office investigation of school financial transactions between July 1, 2004, and June 14, 2010.More than 1,000 payments to 134 vendors for more than $5.3 million were examined.

The audit, released about a week ago, called for the recovery of $1,850,489 in payments made by the school to companies that investigators said were connected to the five school leaders and their associates...

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Eric Mahmoud charter schools

“Georgia file connects Twin Cities charter school, fraud scheme.” Star Tribune (MN), 3/22/2013

When the news broke last summer that charter school entrepreneur Eric Mahmoud had entered a guilty plea to a mortgage fraud charge in Georgia, Mahmoud had a ready comeback for the Minneapolis school district, under whose authorization he was opening another charter school.

“I assure you that this was a personal, residential matter in Georgia and had nothing to do with Seed Daycare, Harvest Prep or any other educational institution,” Mahmoud told Sara Paul, the district’s liaison with charter schools, in an Aug. 16 e-mail.

In that case, Mahmoud has some explaining to do.

According to an investigative file compiled by Georgia authorities, there are at least two connections involving the school with the deal...

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“High Performing Charter Schools: Beating the Odds, or Beating theTest?” National Education Policy Center blog, 8/30/2012

...In Minnesota, birthplace of the charter school movement, one charter school operator labeled an “odds beater” has put a new twist on the concept. Eric Mahmoud, a former engineer and convicted mortgage fraudster, operates a group of segregated charter schools targeted at black, inner-city poor children that employs longer school days and years, strict discipline, and an unabashed strategy of beating state achievement tests.

For his success in raising math and reading scores, Mahmoud has been given rock-star status among charter proponents and recently was inducted into the National Alliance for Public Charter Schools hall of fame. In return, the Minneapolis school board recently awarded him the right to open four more charter schools sponsored by the city's school district, all presumably to be run in what a local conservative columnist laudingly called his “drill and kill” style. News stories and opinion pieces from traditional to the alternative press have nonetheless sung his praises, so desperate is the reform community to raise test scores. Meanwhile, almost no one has questioned the efficacy or morality of deliberately segregated schools, nor ones so focused on improving specific test scores. It seemed that, until very recently, Mahmoud could do no wrong.

Three weeks ago that might all have changed with a series of investigative stories in the Minneapolis Star Tribune by veteran reporter Steve Brandt highlighting fiscal and management questions that, given the lax controls on charter schools and Mahmoud's previous mortgage crime are unsurprising. Among Brandt's cumulative reporting is the following:

• Mahmoud's combined salary for his duties running charter schools (which total 900 enrollment) and their parent organization amounted to $273,000, more than any other superintendent in the state. In addition his wife, whose occupation is listed as “secretary,” took home $105,000, and his daughter got $28,000 as an “administrative aide.”

• Three of the four board members of the schools' parent organization, called “Seed Daycare,” which leases property to the school and provides administrative services, are Mahmoud family members.

• A letter from the charter school's authorizer “asserts that teachers whom Harvest (one of Mahmoud's charter schools) paid as contractors clearly fall under the IRS definition of employees.”

• The school's authorizer, Audubon Center of the North Woods, sent a “letter of deficiency” to Mahmoud asking for clarification of the organization's finances and for an explanation of “frequent payments among Mahmoud's organizations and Mahmoud himself,” and that “it's unclear what they are for and whether state money that supports Harvest and related entities is being used appropriately.”

• The Minnesota Department of Education is seeking to recoup money it granted to Mahmoud for an earlier, failed charter school used for its construction and to equip it. The MNDOE turned this issue over to the state auditor.

• Mahmoud, who operates deliberately segregated schools, is claiming racial discrimination, a claim disputed by the state, in the revocation of a $300,000 grant to one of his schools. The grant was to be used for a federally funded program called Reading First, which required the school to hire a full-time literacy coordinator and to use licensed teachers in the program, neither of which Mahmoud did.

But more important than the financial and management problems at Seed schools is the nature and structure of the educational pedagogy. The schools teach to the tests. Not just teach to them, but engineer high test scores with frequent testing, 100 minute blocks of reading and math each day and other methods...

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“Mahmoud, MDE clashed over pulling grant.” Star Tribune (MN), 8/20/2012

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“State inquiry focuses on failed north Minneapolis school.” Star Tribune (MN), 8/15/2012

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“Mahmoud's 273K salary raises eyebrows.” Star Tribune (MN), 8/15/2012

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"State examining finances of charter founder's schools.” Star Tribune (MN), 8/10/2012

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Dakota Academy

JUDGE'S RULING PERMANENTLY CLOSES DAKOTA ACADEMY: THE JUDGE SAID THE SPONSOR TERMINATED ITS CONTRACT CORRECTLY AND THAT IT HAD "GOOD CAUSE" TO DO SO; August 27, 2007; Star Tribune (Minneapolis, MN) 

A Burnsville charter school will permanently close its doors after a judge's ruling that its sponsor correctly terminated its contract with the school.

Under state law, charter schools need sponsors to operate. Late last week, a Dakota County judge ruled on behalf of Dakota Academy's sponsor, Crossroads College of Rochester, and the Minnesota Department of Education, saying not only that the correct procedure was followed in ending the contract, but that Crossroads can "more than sustain its position that it had good cause to terminate its contract."…

The relationship between Dakota Academy and its sponsor started going south before the school even opened last fall, when Crossroads put the school on probation. Crossroads terminated its contract with the school in December because it said it was having problems getting financial data and other information from founders, Hennepin County District Judge Harry Crump and his wife, Faith…

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TROUBLE MOUNTS AT DAKOTA ACADEMY; THE BURNSVILLE CHARTER SCHOOL, FOUNDED BY HENNEPIN COUNTY DISTRICT JUDGE HARRY CRUMP AND HIS WIFE, MAY CLOSE THIS SUMMER; May 22, 2007; Star Tribune (Minneapolis, MN)

Hennepin County District Judge Harry Crump and his wife, Faith, founded a Burnsville charter school to provide an innovative way to reach students who weren't being served in public schools. But less than a year after opening, Dakota Academy may have to close its doors amid allegations by its sponsor and a charter-school evaluation group that it failed to provide access to financial records and violated the state's Open Meeting Law at a March 26 meeting during which two new board members were appointed.

The sponsor, Crossroads College of Rochester, a small private Christian school, plans to pull out on June 30. Although Dakota Academy officials say they're seeking a new sponsor, if the school doesn't find one, state law requires it to close…

Many concerns about the school are detailed in an April report from the Minnesota Sponsor Assistance Network, a group that evaluates charter schools. The report says the school board held an unannounced, closed meeting on March 26 to appoint two new members, a potential violation of the state's Open Meeting Law. The report also says the school hasn't fully used its financial software, so that officials can't tell if they are on budget. The school has also gone through five academic directors, the report said, which suggests "either ... the hiring process needs significant improvement or the manner in which the academic director is treated has gone awry." Faith Crump declined to comment on the staff turnover, saying it was a personnel issue.

Parents learned in March that the school was losing its sponsorship. After calls from them and a meeting with the state Department of Education, Crossroads agreed to reconsider withdrawing its sponsorship if certain conditions were met. That included a financial audit and the resignation of the board and Faith Crump by May 11. Neither happened. Teachers at the school have also raised concerns about management. Seven of the school's 10 teachers signed a March 30 letter to Faith Crump, asking her to resign. The school hired a new executive director Thursday, and Crump said she'll spend two weeks shifting her duties. Then she'll have no further role with the school, unless the board hires her as the business director, she said. Faith Crump said the school is in discussion with several potential sponsors. Parents and students are watching the upheaval at the school with mixed emotions…

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