Charter School Founder Accused of Giant Scam
WASHINGTON (CN) - The District of Columbia claims in court that a charter school founder steered more than $13 million in public funding to a company he owns, to do management work that direct employees of the school performed themselves.
The District of Columbia sued Kent Amos and Community Action Partners and Charter School Management in Superior Court, accusing them of spending public money on exorbitant fees for Amos' school management company.
"Over the course of the last decade, defendant Kent Amos has caused Community Academy Public Charter School, Inc., a nonprofit corporation, to distribute in excess of $13 million to a for-profit company he owns and controls," the complaint states.
The DC claims that when Amos founded the school in 1998, he received a salary of $160,000 as the school's chief executive, and that after 2004, Amos began dumping hundreds of thousands of dollars a year into a for-profit school management company he created "for the purpose of capturing and disbursing the school's operating profits."
The complaint states: "And since 2004, Amos has caused the school to enter into management agreements with his for-profit company and to pay the company a total of more than $13 million in 'management fees.' In the 2011-2012 and 2012-2013 school years combined, Amos and the management company received approximately $4.4 million from the school, and they are on track to receive about another $2 million from the school for the 2013-2014 school year. These 'management fees' have covered work that could have been performed, and in many cases was actually performed, by direct employees of the school."
Amos and two of the school officials, the DC claims, used their influence over the school's board of trustees in 2004 to execute the first management agreement, which meant Amos and the two officials ceased being school employees and began their employment with Community Action.
Since then, the board has approved an increase in management fees each year, the DC claims.
"By the end of 2013, the Management Company had only four full-time employees: (i) Amos, continuing to function as the chief executive officer of the Public Charter School, (ii) Amos's wife, working as Amos's 'chief counselor,' (iii) Amos's longtime secretary, and (iv) an employee who assists in the preparations for monthly meetings of the Public Charter School's Board of Trustees," the complaint states.
In the past 10 years, that management company made more than $13 million from the charter school, the DC, which sought information from the school explaining the management fees, claims in the complaint.
"The Management Company did not have documents responsive to this request because the Management Company has not had, to use Amos's word, 'substance' separate and apart from the Public Charter School itself. Rather, the Management Company has existed as a 'form' to permit the transfer of operating profits from the Public Charter School," the complaint states.
The DC claims Amos violated its Nonprofit Corporation Act and wants an accounting of the Community Actions' financial records, an injunction preserving its assets and rescission of the management agreements.
The District of Columbia is represented by Bennett Rushkoff, Chief of the Public Advocacy Section of the D.C. Attorney General's office.