The Oklahoma State Bureau of Investigation served a search warrant this week as part of an investigation into Oklahoma's largest virtual charter school.
Epic Charter Schools is accused of inflating enrollment numbers to get more state funds.
The OSBI said in a search warrant affidavit Epic's co-founders split profits of at least $10 million over the course of five years.
Investigators searched an Epic teacher’s home Monday in Oklahoma City. The search warrant said investigators have probable cause to believe there was evidence of these four crimes inside the home: Embezzlement of State Funds, Conspiracy to Commit Embezzlement of State Funds, Obtaining Money Under False Pretenses and Violation of Oklahoma Racketeer-Influenced and Corrupt Organizations Act.
Investigators seized a laptop and a cell phone from the teacher’s home.
The search warrant accuses school leaders Ben Harris and David Chaney of recruiting so-called "ghost students" from home-schooled families and enticing them to enroll by offering an annual "learning fund" ranging from $800 to $1,000.
Investigators said many parents admitted to enrolling their children with Epic to receive money, with no intention of receiving instruction.
Epic receives money from the state for each student enrolled.
A former Epic teacher told investigators one of the co-founders "created an environment at Epic that fostered the commission of fraud by teachers and administrators."
Investigators said they learned from current and former teachers that Chaney and Harris created a pay structure that encouraged “straw teachers.” The affidavit said that teachers were paid based on how many students were in their roster. It said teachers who dropped students from their rosters saw a decrease in their pay.
“Straw teachers had a financial incentive for maintaining ghost students on the roster,” the affidavit said.
The OSBI said it found a student on the enrollment list for both the 2017-18 and 2018-19 school years, who lives in Portland, Oregon. The affidavit said after talking to the student’s mother, an investigator learned she decided to leave Oklahoma and withdrew her daughter from Epic in October 2017.
Epic Charter Schools released documents which they said prove the Oregon student had withdrawn from Epic and was enrolled at a different virtual school in that state.
Epic said in a statement, "that student never re-enrolled at Epic and was never dually enrolled.”
Related Story: Epic Charter Schools Under Investigation By OSBI
In a statement Epic says in part, "We are audited by the Department of Education and state approved auditors each school year and are supremely confident that we operate our public school system within the boundaries of state and federal law."
The charter school co-founders went on to say, "the facts directly contradict the allegations,” and “we are confident the facts will once again vindicate our team.”
The full statement is below, along with the documents provided by Epic Charter Schools.
“We were notified of an investigation in October 2013. We provided information about all of these allegations to the attorney general’s office and the OSBI between 2013 and 2017. More than two years ago, the attorney general’s office determined the evidence did not warrant further investigation, and we believed this to be a closed matter.
“The facts directly contradict the allegations in this affidavit, which have previously been reviewed by state investigators.
“The only new allegation in the affidavit is demonstrably false; the student who moved out of state was withdrawn from our school on November 8, 2017. According to records provided by the student’s new school, the student was enrolled at a different virtual school in Oregon on Nov. 16, 2017. That student never re-enrolled at EPIC and was never dually enrolled.“
"We will continue to cooperate with investigators, as we have throughout the history of our school. We are confident the facts will once again vindicate our team.
“In the meantime, we will continue to serve the more than 23,000 students and families who have chosen EPIC – even if that makes the status quo education lobby uncomfortable.”
Some parents of Epic students are praising the school.
"I just want everybody to give Epic a chance,” Britny Williams said.
The Okmulgee mom has two kids enrolled at Epic. Williams said she's had a positive experience with the school and plans to enroll both of children again this fall. She said her 10-year-old son, Justin, has made noticeable progress with Epic.
"When we first enrolled to now, I can see a big, big difference. My son took the state test on math and he went above and beyond,” Williams said.
She said the only issue she had was when her son was signed up for a class she didn't know about. She said it was quickly resolved.
"We got our money back from when it had messed up,” Williams said.
The OSBI said the investigation is ongoing and would not comment Wednesday, other than to confirm that the search warrant took place Monday night.