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OKLAHOMA CITY — The state’s largest virtual charter school system is under investigation for allegedly embezzling millions in state funding by illegally inflating enrollment counts.

According to a search warrant filed in Oklahoma County court this week, Epic Charter Schools co-founders David Chaney and Ben Harris “acting jointly and together, devised a scheme to use their positions as public officers to unlawfully derive profits from state-appropriated funds.”

Investigators allege Chaney and Harris split profit from Epic Youth Services (EYS) of at least $10 million between 2013 and 2018.

Epic received state appropriated funds from the Oklahoma State Department of Education based on the number of students enrolled, court documents state. Harris and Chaney are accused of retaining “ghost students”, or students enrolled with Epic Charter Schools but received little or no instruction from their teachers. Investigators believe the students were recruited from home-schooled families and private and sectarian schools.

“Ben Harris and David Chaney enticed ghost students to enroll in Epic by offering each student an annual learning fund ranging from $800 and $1,000,” court documents state.

According to the search warrant, one former Epic teacher told investigators she learned a rural family withdrew their ten children from public school and received $8,000.

“The parents did not require the students to participate in any of Epic’s curriculums and they spent their day horseback riding and participating in other non-educational activities,” the search warrant states. “[Teacher] told me the main emphasis at Epic was to keep students on the rolls in order to keep the state aid money.”

In response, Epic Charter Schools released the following statements:

“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. Since our inception in 2011, we have time after time proven ourselves innocent of all allegations. We will again. This latest attack comes at a time when our growth makes status quo education lobbying groups uncomfortable. We are considering legal action to combat what we believe is a coordinated effort to damage our school, our co-founders and our staff.”

“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.”

Oklahoma Attorney General Mike Hunter’s Communications Director, Alex Gerszewski sent News 4 the following statement in response to EPIC’s release:

There has been an ongoing review of issues involving Epic Charter Schools by the Office of the Oklahoma Attorney General and the Oklahoma State Bureau of Investigation for the last several years. Attorney General Hunter spoke with OSBI Director Ricky Adams this morning and advised him, as in any investigation, that the OSBI should follow the evidence where it leads and recommitted our office’s support of his agency’s efforts. The Attorney General’s Office has never viewed this as a closed matter.