Attorney General Todd Rokita is suing a consortium of virtual schools and affiliated organizations for $154 million.
Indiana Virtual Schools (IVS), Indiana Virtual Pathways Academy (IVPA), Indiana Virtual Educational Foundation (IVEF) and other related organizations and individuals are accused of misappropriating funds from the State of Indiana.
“This lawsuit is historic because it represents the largest amount of monetary damages ever sought by our office following a State Board of Accounts investigation,” Rokita said. “This massive attempt to defraud Hoosier taxpayers through complex schemes truly boggles the mind. This case demonstrates once again that public servants must remain ever vigilant in our work to safeguard the public treasury from opportunists.”
Daleville Community Schools sponsored charter schools operated by IVS and IVPA from July 22, 2015 to Aug. 26, 2019. IVS and IVPA failed to meet minimum academic standards and failed to comply with accounting and required related provisions, causing Daleville officials to revoke the charter.
A State Board of Accounts (SBOA) investigation concluded public funds were misappropriated through malfeasance, misfeasance and/or nonfeasance. The schools wrongfully collected $68 million by misrepresenting enrollment numbers. The schools also paid vendors more than $85 million without an invoice or itemized information on the invoice.
“The State Board of Accounts is committed to creating a culture of accountability where public officials and institutions are held to the highest standards,” said State Examiner Paul Joyce. “We appreciate the Attorney General for bringing this action on behalf of all the citizens of the State of Indiana.”
Rokita also is seeking recovery of the SBOA audit costs as well as penalties and punitive relief, amounting to three times the actual loss. In addition, Rokita is “seeking an order that the defendants disgorge any other ill-gotten gains unjustly and wrongfully received and diverted.”