OKLAHOMA CITY (KFOR) – The Oklahoma State Bureau of Investigation has arrested the founders of Epic Charter Schools and its former Chief Financial Officer (CFO) on multiple charges stemming from investigations dating back to 2013.
Founders Ben Harris and David Chaney, and former CFO Josh Brock are facing charges of:
- Embezzlement of State Funds
- Obtaining Money by False Pretense
- Conspiracy to Commit a Felony
- Violation of the Oklahoma Computer Crimes Act
- Submitting False Documents to the State
- Unlawful Proceeds
The OSBI investigation began in 2013 at the request of then-Governor Mary Fallin based on a complaint from the Oklahoma State Department of Education (OSDE) of dual enrollment.
A second request was made in 2019 from a state legislator concerned about misappropriation of state funds that were obligated to Epic Blended Learning Centers.
“This has been a very complex and arduous investigation with many roadblocks causing delays in getting to the truth,” said Ricky Adams, OSBI Director. “Harris, Chaney and Brock came up with a ‘get rich quick scheme’ that lined their pockets with tax dollars that were to be spent for the benefit of Oklahoma students. The OSBI criminal investigation unraveled the intricate scheme layer by layer, in spite of a lack of cooperation, legal obstacles and delay tactics.”
OSBI investigators say through Epic Charter Schools, Epic Youth Services (EYS) and the Student Learning Fund, a complicated criminal enterprise emerged that involved among other things: co-mingling of funds, excessive and unnecessary management fees, the use of Oklahoma tax dollars in California, political influence, concealment of profits, submission of false invoices, and the illegal use of employees.
Over the years, the scheme resulted in a cost to the state of Oklahoma in excess of $22 million.
“Harris and Chaney and Brock’s actions are the largest abuse of taxpayer funds in the history of the state,” said Cindy Byrd, State Auditor & Inspector.
Byrd said the dollar amount could be far higher than $22 million.
In a press conference, she outlined the Epic Charter Schools criminal enterprise which was spawned by its founders and former CFO.
The Student Learning Fund created by Chaney and Harris was paid for by the state. The founders then used that money as a line of credit back to the school, where they paid themselves handsome profits.
Byrd iterated time and again that the money from the fund was paid for by state dollars, $1,000 per student counted. She said the men used the fund as their personal banks, even helping themselves set up a start-up Epic Charter School in California.
The state auditor said that it was Oklahomans that lost out on this fraud.
“This was 100 percent publicly funded, no part of the school was private,” said Byrd.
“We are grateful for the assistance of State Auditor & Inspector Cindy Byrd and multiple independent private audit agencies that helped throughout the investigation. I also want to thank District Attorney David Prater for pursing this case on behalf of Oklahoma students, their families and the tax payers,” said Adams.
Harris, Chaney and Brock were taken into custody at approximately 10 a.m. and were transported to the Oklahoma County Detention Center.
They have a $250,000 bond.
Oklahoma state and current Epic school leaders responded to the arrests Thursday afternoon.
“The money that Epic’s founders took was taxpayer dollars for children’s learning. They not only robbed the children of Epic but the children of Oklahoma. It is unconscionable that the alleged deceitfulness of the school’s founders made them multimillionaires at the expense of taxpayers. This fraud was allowed to happen because of cracks in state law that still exist today. It is indisputable that they were able to exploit open and obvious weaknesses in the law for their own personal gain. This saga also highlights why there is no room for a for-profit management school in public education. Epic’s management turned the purpose of education on its head and incentivized cash over kids.”State Superintendent of Public Instruction, Joy Hofmeister
Just over a year ago, Epic Charter Schools formally and legally severed ties with the co-founders. Today is the culmination of several years of investigations and questions regarding the mismanagement of state taxpayer funds under their watch.
We have suspected this day was coming for a long time and frankly expected these results. Hopefully, this is a day of healing for our Epic family – our caregivers, our students, and our staff who have been through the ringer, especially this past 13 months.
This past year has been tumultuous as our newly-created board and new executive leadership has worked diligently to deconstruct ten years of bad policies by the former management company, many of which are noted in the headlines breaking as we speak.
Today leaves little doubt we inherited a complex web of misdirection and dishonesty. With each layer of discovery, our new executive leadership has faced it and worked with the board to replace it.
Today, Epic Charter Schools stands for transparency and working cooperatively with state agencies as they speak truth to power. In particular, I would like to recognize the OSBI and State Auditor Cindy Byrd for their diligence.
We proudly represent more than 37,000 students in Oklahoma, and employ 1,700 dedicated education professionals working every day to make sure Epic emerges from this era with a renewed focus on what is most important: the future of our students relying on us to provide an education that empowers them and most importantly, creates space for them.
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.Epic Charter Schools Board of Education Chair, Paul Campbell