OSBI investigating Epic Charter Schools for alleged embezzlement through 'ghost students'

VIDEO: New investigation into Epic Charter School's founding practices

TULSA, Okla. — The Oklahoma Bureau of Investigation is looking into embezzlement allegations against Epic Charter Schools.

OSBI is accusing Epic Charter Schools -- the state's largest charter school -- of embezzling $10 million over the course of five years by inflating enrollment counts using "ghost students."

Investigators served a search warrant in Oklahoma City on Tuesday at the home of an Epic employee and seized a laptop and iPhone.

Content Continues Below

According to the OSBI affidavit, Epic founders Ben Harris and David Chaney devised a scheme to illegally take profits from state funds. The affidavit says over five years, Harris and Chaney received $10 million in profits from Epic Youth Services -- the for-profit company that manages the virtual charter school.

Epic Charter Schools received $41 million in education funds in 2017 and is set to receive $112 million this year.

The OSBI says they found several students were counted in the school's enrollment numbers but were either homeschooled, in private schools, or received little-to-no instruction from Epic.

Governor Kevin Stitt and State Superintendent Joy Hofmeister called for an investigative audit of Epic Charter School and all related entities in a letter submitted by Gov. Stitt to State Auditor Cindy Byrd Friday. The audit request will involve a three-year look back on all previously issued audits of Epic, to include any federal audits.

"Oklahoma is investing in public education at the highest levels in our state's history, while also modernizing and developing new solutions for the delivery of education that ensures the best outcomes for Oklahoma's children," said Gov. Stitt. "As we progress towards becoming a Top Ten state, we must be equally committed to accountability and transparency across the public education spectrum. This is why we are requesting for the State Auditor to engage with an investigative audit of Epic Charter School and its related entities."
"As every public education dollar is precious, it is critical that there be full transparency and accountability for how those dollars are spent. I commend Gov. Stitt In calling for this audit to help shed light on the matter," said State Superintendent Joy Hofmeister.

Oklahoma State Superintendent Joy Hofmeister called the allegations "serious" and "disturbing" on Twitter Tuesday night.

Hofmeister released the following statement:

"The State Department of Education stands ready to work with any criminal investigation to determine if public education and countless Oklahoma taxpayers have been defrauded of millions of dollars. In the meantime, it is important to let the legal system do its work. For the sake of Oklahoma students and families all across the state, we must ensure accountability of all education funding. We understand that today's events may create confusion and stress for many students and families. They have our support." - Oklahoma State Superintendent Joy Hofmeister

In a statement, Epic Charter Schools Assistant Superintendant of Communications Shelly Hickman said the following:

"We are audited by the State 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."

Epic was also investigated for fraud in 2013 but no charges were filed.

Epic Charter Schools has office locations in Norman and Tulsa.

Trending Stories

Trending Video