A state investigation alleges Epic Charter Schools, the state’s largest virtual charter school system, embezzled millions in state funds by illegally inflating enrollment counts with “ghost students.”
The Oklahoma State Bureau of Investigation alleged Epic co-founders David Chaney and Ben Harris “devised a scheme to use their positions as public officers to unlawfully derive profits from state appropriated funds.”
An OSBI agent made the allegations in a search warrant that sought evidence of embezzlement, obtaining money by false pretenses and racketeering.
Investigators reported Chaney and Harris “created a system of financial gain at Epic” when they founded the virtual charter school in 2010. The two co-founders have managed the virtual charter school through a for-profit company, Epic Youth Services, which receives a portion of Epic’s state funds.
Epic, which enrolled just under 20,000 students last year, is a public charter school that receives state education funding for each student enrolled. There is no cost to students to attend.
In a statement emailed to The Oklahoman, Epic referred to the allegations as a "coordinated effort" to attack a fast-growing school that "makes status quo education lobbying groups uncomfortable," said Shelly Hickman, assistant superintendent of communications for Epic.
“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," Hickman added. "Since our inception in 2011 we have time after time proven ourselves innocent of all allegations. We will again."
In its search warrant, OSBI alleged between 2013 and 2018, Chaney and Harris unlawfully received $10 million in profits from Epic Youth Services and split the total.
OSBI agents reportedly found dozens of “ghost students” counted in Epic’s enrollment numbers, though they were homeschooled or also attended private and sectarian schools, according to the search warrant, which was filed Tuesday in Oklahoma County District Court.
These students were enrolled in Epic but “received little or no instruction from Epic teachers.”