Two Oklahoma businessmen will be in court in Oklahoma City on March 25 on charges that they bilked taxpayers out of millions of dollars through a charter school that they controlled.
David Lee Chaney and Benjamin Scott Harris, former heads of Epic Charter Schools in Oklahoma, are facing 15 criminal counts. They include racketeering, embezzlement, using a computer system or computer network to execute a scheme to defraud, presenting false claims to the state, acquiring unlawful proceeds in excess of $50,000, obtaining money by false pretenses, and money laundering.
Joshua Brock, the charter school’s former chief financial officer, has reportedly reached an agreement with prosecutors and will testify for the state.
Preliminary hearings on the charges are scheduled to begin on March 25 in the District Court of Oklahoma County in Oklahoma City.
According to court records, Mr. Chaney and Mr. Harris founded a nonprofit organization, Community Strategies Inc., in 2009. They then reportedly set up Epic Youth Services as the charter management company for Epic Charter Schools.
They allegedly hand-picked a board of directors to oversee the operations of Epic One-on-One Charter Schools and Epic Blended Charter Schools, among other entities.
In Oklahoma, charter schools can be operated by community organizations or groups. They must be sponsored by a local education agency and comply with state and federal laws. Because they receive public funds, charter schools cannot charge tuition or be affiliated with any religious organizations.
In return, charter schools have more latitude in how they operate.
In 2019, the Oklahoma State Bureau of Investigation (OSBI) began looking into allegations of fraud, money laundering, and other crimes at Epic Charter Schools. That same year, Gov. Kevin Stitt requested State Auditor and Inspector Cindy Byrd’s office perform an investigative audit.
“This is a serious situation, and it involves millions of state and federal tax dollars that had been directed to personally profit two owners of an education management company,” she said during the briefing.
The audit report and court records allege that between May 1, 2010, and July 1, 2022, Mr. Chaney and Mr. Harris used a combination of business entities, lax bookkeeping, and fraudulent claims to line their own pockets with public education money. OSBI investigators reported that Community Strategies Inc.’s hand-picked board was instrumental in the scheme.
“[The defendants’] actions and behaviors were indicative of individuals with great influence over the school and the board,” the court record reads. “The board consistently voted unanimously during meetings, rarely questioning the recommendations given or actions taken by Chaney, Harris, and Chief Financial Officer (CFO) Brock.”
According to the court record, some education officials expressed concern over Epic early on. One example was the 2010 sponsorship of an Epic Charter School in Okfuskee County.
Then Graham-Dustin Public School District Superintendent Dusty Chancey reportedly told OSBI investigators that there were problems with Epic from the very beginning. He said that the school that his district sponsored turned out to be located in a church in Oklahoma City, not Okfuskee County, where his district is located, as required by law.
In addition, Mr. Chancey reportedly told investigators that Epic did not correctly vet school personnel and allegedly paid $90,000 in remodeling costs for the church.
According to the audit report, the men used the for-profit status of Epic Youth Services (EYS)—the charter management company that they had set up—to resist investigators. The report states that they claimed that their financial records were private because EYS was a private business.
The auditors took issue with that, given the fact that EYS had received $458 million in public funds during the six-year period that OSBI was investigating.
“EYS has restricted [the auditors’] access to these records, and transparency for public accountability purposes is non-existent,” the audit report reads.
Learning Fund Questions Raised
According to the report, the fund budgeted between $800 and $1,000 annually for each student. The report states that there is little information on the fund’s methodology or purpose. But millions of dollars reportedly passed through the fund to EYS with little oversight or explanation.According to the report, Mr. Brock, in his role as CFO, processed invoices submitted to the fund. Mr. Chaney, acting as Epic Charter Schools superintendent, approved the expenditures, which were unanimously approved by the board on a consent agenda after the money had been spent.
“With one hand, Brock and Chaney were invoicing Epic, and with the other hand, they were approving payments from Epic to EYS,” the audit report reads.
“The board failed to provide meaningful oversight.”
Epic Charter Schools still operate with a new board. The board severed ties with the three men in 2020. In a statement released after the three were arrested in 2022, then-board Chairman Paul Campbell vowed to turn the organization around.
The Epic Charter Schools website contains links to various financial reports, information on state law, and the State Auditor’s webpage.
“Great challenges lie ahead but the thousands of parents that have placed their trust with our team should not worry. I promise you we will be here day after day and year after year to see your child thrive,” Mr. Campbell’s statement reads.
