Florida's McKay scholarships create Fraud and Chaos, part 2

From the Miami  NewTimes

by Gus Garcia-Roberts

He was on the lookout for outfits such as Jacksonville's Cyber Tech Academy, to which the state had paid $54,000 in tuition through 2004 despite the fact that the school didn't physically exist.

That's as proactive as any investigation ever got, says Stoughton, a former Tallahassee Police officer. From 2005 through 2008, he worked with three to four colleagues in the DOE's Office of Inspector General. "I never got the sense that we really got a good grasp on the scope of potential fraud," he says.

Seth StoughtonJeb BushFlorida Department of EducationDisabilitiesPrivate EducationRegistering a private school is as easy as filing minimal start-up paperwork. Becoming eligible to receive McKay payments isn't much tougher and relies mostly on the honor system: You must claim to have a location, promise to run background checks on staffers, and either have been in business for three years or have access to a surety loan or line of credit. "The restrictions on opening a school are so relaxed," Stoughton says, "that it's almost a right rather than a privilege."

The DOE has investigated 38 schools suspected of McKay fraud. In 25 cases, the allegations have been substantiated. Of those, five — Muskateer's Academy, Paladin Academy, Choice Preparatory School, Center of Life Academy, and Hope Academy — were in Miami-Dade.

The thieving schools across the state received, or in many cases are still receiving, McKay money totaling $49.3 million.

In the 27 investigative reports that were made available to New Times — the rest have been purged — the vast majority were sparked by a tip, usually from an associate with an ax to grind. A few of the more notable cases:

• At Homestead's Hope Academy, recipient of $2.8 million from McKay, a 2010 investigation revealed at least three staffers had criminal records. One of the employees had pleaded guilty in Georgia to intent to distribute cocaine. Another had served two years in the same state for the sale of marijuana. The school is the target of a lawsuit filed by a mother who claims her developmentally disabled daughter was repeatedly molested by a classmate on a school bus and that principal Cecil Persaud did nothing about it. Visited by New Times, Persaud — a gray-toned man with a patchy mustache — claimed the fraud "didn't ring a bell," refused to discuss the molestation lawsuit, and threatened to call police.

• The most common caper involves simple forgery: school administrators doctoring attendance records and signing parents' names to show that students are enrolled when they're actually not. Jacksonville's Success Academy — which received $4.8 million — was likely the largest such case. From 2001 through 2005, the school accepted $421,000 for 52 students who were enrolled in public schools.

• At Muskateer's Academy in Hialeah (Stoughton says of the name: "I think they just had no idea how to spell"), husband and wife school owners Jacqueline and Erick Cermeno were indicted for stealing several students' disability information to falsely enroll them and pocket thousands in tuition. Muskateer's received $794,000 from the state. The Cermenos were sentenced to ten years' probation and seem to have disappeared to Texas.

But some of the most egregious offenders have evaded even a slap on the wrist. In February 2008, Stoughton's office held countless hours of deposition and prepared a damning 795-page report in exposing a similar $78,000 fraud at Harvest Christian Academy in Tampa. The principal, Bishop Michael Wayne Lewis, was already serving five years in federal prison for a $3 million bank fraud case. Lewis scoffed that because "he was currently incarcerated for a scheme involving the theft of $3 million," according to a report, "he would not 'waste' his time with $78,000."

The State Attorney's Office (SAO) apparently agreed, deciding not to press charges. "This was a case I had worked on the entire time I was there," Stoughton says. "It was incredibly frustrating."

The apathy to McKay fraud was politically motivated, he believes. "This program was the governor's baby, and he had a lot of political capital invested in this," the former investigator says of Bush, who held office until January 2007. "My understanding was that he viewed our investigations as negative publicity about the program."

Counters Bush's spokesperson Jaryn Emhof: "Governor Bush has consistently supported greater accountability over the scholarship programs."

Of the case reports provided to New Times, only three resulted in arrests. The vast majority of offenders were ordered to simply repay the stolen money, although many of them have failed to make payments.

In October 2007, prosecutors did decide to press charges in a case involving two sisters. Betty Mitchell and Jeannette Nealy had swindled at least $200,000 in McKay money through Faith Christian Academy in Polk County.

Stoughton helped the SAO write a news release, detailing the fraud and the sisters' potential prison time — they would later be sentenced to a combined 17 years — to send to media outlets. There's no deterrent to like-minded schemers, Stoughton believes, like a nice, scary news story.

When Stoughton shipped a draft of the release up the flagpole at the Department of Education, he says, "The response I got was essentially: This is good news how?"

Stoughton eventually left the department to go to law school. The DOE never sent out that news release.

Sheldon "Klassy" Klasfeld, beaver-toothed and round-spectacled with slicked curly locks, sits in his junk-clogged sliver of an office in the front of Academic High School. The principal and founder of the Boca Raton academy — and perennial candidate for the Florida House — is in full stall-and-divert mode, waxing at length about his hippie days in Pittsburgh, clearly reluctant to give a tour of his school, located in a nondescript strip mall.


Eventually, he exhausts his tale of hitchhiking to Woodstock and opens a door into maze-like halls of yellow wood panels, scrawled in places with black graffiti.

Seth StoughtonJeb BushFlorida Department of EducationDisabilitiesPrivate EducationIn two classrooms, high school kids sit in oppressive silence, plowing through workbooks. The teachers are at their own desks, saying nothing. This is not an exam day: Academic High students get credits, and eventually diplomas, by filling out answers in textbooks every day from 8 a.m. to 1:30 p.m. Lunch is not served, though kids can buy chips and soda from vending machines wedged in a corner.

The state is aware of Klasfeld's special brand of academia. In 2003, the Palm Beach County school board shuttered Academic High — which was then a charter school — for mismanaging its budget and cramming multiple classes into one room. Klasfeld appealed in person to the Florida Cabinet, where he was unanimously denied by a panel including Governor Bush and then-Education Commissioner Charlie Crist.

Within a year, Academic High re-opened as a private school and has received $138,000 in McKay cash, drawing the same milk from a different DOE teat.

Ask Klasfeld, though, and he's simply providing options to students, most of them with learning disabilities, who would never pass Florida's standardized tests required for graduation in public schools. "I used to be a big advocate against the FCAT," he remarks while sitting at a picnic table outside after the hasty tour. "Then I realized it was just bringing more kids to us."

After some consternation, Klasfeld pulls a student out of class to speak with a reporter. Seventeen-year-old Alex is pock-marked and slow-speaking. Until 2009, he attended Coral Springs' Academy High School — which received $3.7 million in McKay funds — before administrators there were caught forging parents' signatures, among other ploys, to continue receiving money after the disabled students were no longer enrolled.

Alex says it's not entirely just book work at his new alma mater. "We do reports too," he says. "About presidents, about Osama, stuff like that."

Klasfeld sits across the picnic table from Alex and often interjects nervously. Alex says he wants to enlist in the Army after he gets his diploma. "Ten-hut!" the principal hollers nonsensically. "Sir, yes, sir!"

As the program director of a Fort Lauderdale tutoring and after-school nonprofit called HANDY — Helping Abused, Neglected, Disadvantaged Youth — dealing mostly with poor and African-American children, Kirk Brown is depressingly familiar with the scourge of two-bit McKay schools "preying" on South Florida's inner cities.

Twenty-eight percent of the scholarship fund's students are African-American, and 45 percent qualify for free or reduced-price lunches. Ghettos tend to attract the huckster portion of the McKay schools. In neighborhoods such as Liberty City and Sistrunk, it seems, you can't swing an FCAT without hitting a dubious educator setting up a fly-by-night school designed to lure kids who might otherwise struggle with standardized testing.

Any combination of the words preparatory, Christian, hope, academy, and perhaps Zion usually appear in the name. The administrators make their arrival to a neighborhood known by leafleting and billboarding housing projects. Or they show up at Sunday services and prowl for old ladies wearing church hats and toting children. "They look for kids who don't have traditional parents," Brown says. "Grandmothers, aunts, uncles — anybody who's not necessarily going to do their homework and may be swayed by the religious angle."

The inevitable morning comes when those students show up for class to find only an empty store for rent, or they attempt to transfer to another high school or matriculate to college and are informed their credits are worthless.

"They have that look of somebody whose house just got robbed," Brown says of the children he's watched go through the experience. "These schools are run by the worst kind of parasites. All these kids have is their education, and that's what they're trying to steal."

But sometimes the parasites don't have to do that much work, because public school administrators do it for them.

Beginning a few school years ago, Carol City Senior High social studies teacher Paul Moore was mystified by a new, perennial exodus of his "problem" seniors — students who might fare badly on FCATs. They were kids he usually liked to have one last-ditch shot at improving their studies.

Eventually, he figured out where many of them had ended up: Parkway Academy in Miramar, a charter school and target in 2009 of the Florida High School Athletic Association's largest fine — $260,000; later reduced to $118,000 — for dozens of football recruiting violations. Other of Moore's missing seniors had scattered to private schools, most of them McKay-funded. "It's an absolute policy in this state now to move at-risk kids to charter or private schools," Moore says.

http://www.miaminewtimes.com/2011-06-23/news/mckay-scholarship-program-sparks-a-cottage-industry-of-fraud-and-chaos/4/