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<\/a>The charges involve co-mingling of funds, excessive and unnecessary management fees, use of Oklahoma tax dollars in California, political influence, concealment of profits, submission of false invoices and the illegal use of employees.\u00a0<\/p>\n\n\n\n
One of the school\u2019s largest recruitment tools, the learning fund, was used to conceal illegal purchases, agents alleged. For the learning fund, Epic makes at least $1,000 available to each student annually in a virtual account. Parents can allocate those dollars for curriculum, laptops and extracurricular activities. <\/p>\n\n\n\n
Parents don\u2019t receive the money directly. Instead, they request a purchase from Epic and the school transfers the money to Epic Youth Services, which pays the vendor. <\/p>\n\n\n\n
Chaney and Harris used a separate bank account to make learning fund purchases, and investigators found Chaney and Harris didn\u2019t return unused learning fund dollars. <\/p>\n\n\n\n
The account received nearly $145 million between 2015 and 2021. More than 50 times, Chaney, Harris and Brock transferred public funds from the learning fund account to the private bank account for Epic Youth Services, which was then used to pay a lobbying firm. Capital Gains, a lobbying firm run by Robert Stem, a longtime friend of Harris\u2019, was paid more than $500,000. <\/p>\n\n\n\n
State Auditor and Inspector Cindy Byrd, whose office helped with the criminal investigation after several audits, said more than $55 million in public funds could have gone to the founders. The exact amount won\u2019t be known until the Internal Revenue Service completes its own investigation. <\/p>\n\n\n\n Byrd, in a press conference at the Capitol, said Epic used a similar management and business structure to conceal expenses at its California school, Oxford Prep, as it did in Oklahoma.\u00a0<\/p>\n\n\n\n \u201cEpic Youth Services received thousands of dollars in consulting fees for Oxford Prep from 2013 to 2016,\u201d Byrd said. \u201cWhen Harris and Chaney and Brock created this complex scheme, which is the linking of nonprofits with for-profits to make money, it looks very similar to what was done in Oklahoma.\u201d\u00a0<\/p>\n\n\n\n Byrd, who is running for reelection in the primary election on Tuesday, said she had expressed concerns publicly and privately about Epic\u2019s business practices under its founders and former CFO. She detailed more than $200,000 in political contributions to various candidates in the 2016 and 2018 elections, as well as money for public relations, lobbying and legal services to deflect questions about the school\u2019s operations.\u00a0\u00a0<\/p>\n\n\n\n \u201cThe state auditor\u2019s office has fought to ensure that this situation was not swept under the rug, even when Harris and Chaney utilized tax dollars to silence and discredit the investigation and findings,\u201d Byrd said. <\/p>\n\n\n\n The political giving, some paid using a student learning fund credit card, continued in the 2020 election cycle. This time, much of the money was given to political action committees making independent expenditures to support or oppose candidates, Byrd said. Among the candidates targeted by those dark-money groups was Sen. Ron Sharp, who had called for an investigation into Epic in 2019. Sharp lost his reelection bid.\u00a0<\/p>\n\n\n\n The affidavit<\/a> said Chaney used his American Express to donate $100,000 in 2019 and 2020 to the Oklahoma Council of Public Affairs, an Oklahoma City-based think tank that has supported school choice. Epic Youth Services also donated more than $55,000 to the State Chamber of Oklahoma, which later filed a friend-of-the-court brief in a lawsuit supporting Epic\u2019s legal position in keeping secret expenditures from the student learning fund<\/a>. <\/p>\n\n\n\n Byrd called the embezzlement \u201cthe largest abuse of taxpayer funds in the history of the state.\u201d <\/p>\n\n\n\n \u201cGovernment is not a private business,\u201d she said. \u201cIt is a stewardship of services, which means the taking and spending of money must be done in accordance with the law and with accountability and transparency.\u201d<\/p>\n\n\n\n Epic Youth Service continued to embezzle funds after the audit began, the affidavit states. And while the company made periodic repayments, the amount repaid was more than $1 million less than the amount taken. <\/p>\n\n\n\n One of Chaney\u2019s credit cards, used to make student learning fund purchases, was also used to pay for vacations and personal purchases, agents allege. And it accumulated points worth nearly $40,000. <\/p>\n\n\n\n The OSBI\u2019s investigation started in 2013 at the request of Gov. Mary Fallin but accelerated in 2019 when investigators served two search warrants to collect evidence. <\/p>\n\n\n\n Later that year, Gov. Kevin Stitt called for an investigative audit of the school. The findings, released in 2020, revealed more than $125 million of the school\u2019s revenue was directed to Harris and Chaney\u2019s company, Epic Youth Services from 2015 to 2020. The two founded the school in 2011. <\/p>\n\n\n\n Epic severed ties with the co-founders, their company, and Brock last year.<\/p>\n\n\n\n Paul Campbell, who has served as Epic\u2019s board chair since 2021, said Thursday he was not surprised by the arrests. \u201cWe\u2019ll let the justice system do its part,\u201d he said. <\/p>\n\n\n\n See all of our Epic Charter Schools coverage dating back to 2016 here<\/a>. <\/p>\n\n\n\n![\"\"](\"https:\/\/i0.wp.com\/oklahomawatch.org\/wp-content\/uploads\/2022\/06\/EpicAudit_70.jpg?resize=771%2C515&ssl=1\")
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