An Indiana online charter school founder and his wife appeared in court after allegedly mortgaging a $2.6 million Florida condo, resulting in foreclosure. The state is trying to recoup over $154 million lost in enrollment fraud by Indiana Virtual School. The couple is also behind on taxes for their home. The Hamilton County Superior Court delayed a hearing on their assets agreement violation. The state hopes to recover misappropriated funds for personal gain and continue pursuing the case.
The Stoughtons have had rotating attorneys due to payment issues. In a federal criminal case, Stoughton’s attorney withdrew for unpaid fees. The couple violated a spending agreement and faced a foreclosure sale on their Florida property. They reportedly sold the condo to pay off the mortgage.
The state alleges contempt for violating the agreement and seeks intervention for compliance. Lawsuit findings show inflated student enrollment resulting in funds misuse and payments to companies linked to school officials. In January, Stoughton and others were indicted for defrauding the state by falsely reporting student enrollment.
The investigation findings prompted the lawsuit against the Stoughtons and others involved in the alleged fraud. The state is determined to recover misappropriated funds and hold the defendants accountable. Contact WFYI education reporter Dylan Peers McCoy for more information.
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