Ohio probes charter school operators accused of defrauding parents, students and taxpayers in Florida
Ohio’s top public accountant is actively investigating the case of two businessmen accused of using charter schools to defraud Florida taxpayers, students and schools — and maybe here, too.
On Friday, Ohio Auditor Dave Yost acknowledged that a probe has been ongoing for a year. Meanwhile, court documents filed this month in Florida indicate 19 Ohio charter schools were overbilled nearly $600,000. Prosecutors and forensic accountants say the money was laundered through 150 bank accounts and shell companies then returned as “rebates” and “kickbacks” to Marcus May, who once ran more than 20 charter schools in Ohio.
In 2012, May used a parent company, Newpoint Education Partners LLC., to open Cambridge Education Group, a charter school operator based in Akron. To grow business in Florida, authorities say he “falsely represented” that his Ohio schools were well managed. By 2016, prosecutors say he allegedly defrauded Florida and its public schools of more than $1 million.
May has repeatedly declined to speak with the Beacon Journal.
The pattern in Florida seems to mirror transactions in Ohio.
One forensic document in the Florida case details how Ohio schools paid $1.1 million to Apex Learning, a Seattle-based company May used to bill the 19 Cambridge schools in Ohio and 15 Newpoint schools in Florida for online and hard-copy curriculum. Russ Edgar, the lead Florida prosecutor in the white collar criminal case against May, has produced invoices that show how Apex inflated pricing for furniture and computers to siphon $229,756.57 from Florida’s education system and $456,551.92 from Ohio schools, including four in Akron.
“After the allegations in Florida came to light, Marcus May was immediately relieved of any managerial duties and later of his equity in Cambridge,” John Stack, co-owner of Cambridge, said in a written statement. He said Cambridge hired a forensic accountant to find out if Apex negatively impacted any Ohio schools. Once the schools were identified, the money was returned.
Of the 18 Cambridge schools still open in Ohio, 13 signed new management contracts this summer with Oakmont Education. Stack founded the company with Marty Erbaugh, an investment banker from Hudson. Oakmont will take over Cambridge’s dropout recovery high schools for struggling teenagers and young adults.
“Oakmont doesn’t believe that any of the schools we manage were negatively affected by Marcus May’s actions or Cambridge’s management,” said Stack, who filed the paperwork to create Oakmont on March 20, four days after a Florida jury convicted one of May’s associates.
Ohio connection
Allegations of self-dealing surfaced in late 2016 when a Cleveland school managed by Cambridge questioned what May was doing with state funds. Boards at the other schools have stuck with Cambridge, or moved to Stack’s Oakmont, through the ordeal.
Prosecutors say bank records show that May spent public funds — some of it provided by parents for student uniforms and lunches — on exotic trips, jet skis, a mansion mortgage, plastic surgery and other personal effects. Court documents in Florida connect some of the money to Ohio land that houses the Cambridge headquarters at 481 N. Cleveland-Masillon Road, a title agency on South Main Street and charter schools in Cleveland and Columbus. The Beacon Journal checked with the Ohio Secretary of State’s Office to see who’s behind the companies that own these properties. The secretary’s office said Continue reading: Ohio probes charter school operators accused of defrauding parents, students and taxpayers in Florida
