Federal Indictments Unveil Massive Education Fraud Scheme in Indiana
In a significant development, federal authorities have unveiled a multi-million-dollar fraud scheme involving two online charter schools in Indiana. A federal grand jury has indicted three individuals—Thomas Stoughton, 74; Phillip Holden, 62; and Percy Clark, 81—for allegedly defrauding the Indiana Department of Education (IDOE) through their operation of the Indiana Virtual School (IVS) and the Indiana Virtual Pathways Academy (IVPA). (justice.gov)
Between 2016 and 2019, the indictment alleges that the trio falsely reported enrollments of over 4,500 students who were not attending classes, thereby inflating their funding from the state. This fraudulent activity resulted in the misappropriation of more than $44 million in taxpayer funds. (fox59.com)
The scheme involved several deceptive practices, including:
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Inflated Enrollment Figures: Reporting students who were not attending classes to boost funding.
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Non-Disenrollment of Inactive Students: Failing to remove students who had dropped out or were not participating, thus maintaining higher enrollment numbers.
- Processing Incomplete Applications: Accepting students with incomplete applications to artificially increase enrollment statistics.
These actions led to the misallocation of funds intended for actual students, depriving them of essential educational resources. (fox59.com)
In addition to the federal charges, Indiana Attorney General Todd Rokita filed a $154 million lawsuit against the operators of the virtual charter schools, seeking restitution for the misused funds. (fox59.com)
The indictment underscores the critical need for stringent oversight and accountability in the management of educational institutions to prevent such fraudulent activities and ensure that resources are utilized effectively for the benefit of students.
Federal Indictments in Indiana Education Fraud Case:
- Virtual charter school trio federally indicted
- Indiana Virtual School operators indicted in federal court | Fox 59
- Federal grand jury indicts Indiana virtual charter school leaders in alleged $44M enrollment scheme
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