Ohio school official charged in $470,000 scheme

JULIE CARR SMYTH

Asso­ci­ated Press

COLUMBUS — A for­mer trea­surer for more than a dozen Ohio char­ter schools was charged Thurs­day with embez­zling more than $470,000 in fed­eral edu­ca­tion funds over six years.

U.S. Attor­ney Carter Stew­art filed an embez­zle­ment count against 57-year-old Carl W. Shye Jr. in U.S. Dis­trict Court. Shye faces up to 10 years in prison, up to $250,000 in fines and three years of super­vised release, and would have to return the money.

Shye, of New Albany, han­dled the finances of for­mer char­ter, or com­mu­nity, schools in Colum­bus, Youngstown and Day­ton. Under Ohio law, such schools oper­ate inde­pen­dently of any school dis­trict but under con­tract with a spon­sor­ing entity.

U.S. Dis­trict Judge Gre­gory Frost has set Shye’s arraign­ment for June 21.

Ohio Audi­tor Dave Yost said he first spot­ted a pat­tern of ques­tion­able spend­ing involv­ing Shye based on state audits. Sev­en­teen sep­a­rate state audits had resulted in more than $1 mil­lion in find­ings against Shye over a decade, in 62 cita­tions involv­ing 10 schools.

“Carl Shye has run amok with the pub­lic trust and with pub­lic dol­lars,” Yost said at a news con­fer­ence. “The key is that today that run comes to an end.”

No one answered at a phone num­ber listed for Shye. A mes­sage was left seek­ing com­ment with Shye’s attor­ney, Mike Bowler in Akron.

Offi­cials said it is not unusual for char­ter schools to share a trea­surer to save money. Shye served for a decade at var­i­ous schools — some­times serv­ing in tan­dem, some­times mov­ing on to a new loca­tion after a cur­rent school folded. He was required to resign his trea­surer duties as a result of the investigation.

The sum cited in the government’s case against Shye involves per-pupil fund­ing for four com­mu­nity schools that was sent to the Ohio Depart­ment of Edu­ca­tion and dis­trib­uted to the schools, author­i­ties said. All have since closed.

The schools involved were the for­mer George Wash­ing­ton Carver Prepara­tory Acad­emy, in Colum­bus; the for­mer Legacy Acad­emy for Lead­ers & the Arts, in Youngstown; and the for­mer NuBethel Cen­ter of Excel­lence and New City Com­mu­nity School, both in Dayton.

Stew­art said the FBI’s inves­ti­ga­tion is ongo­ing, and so he declined to dis­cuss specifics about how Shye might have used the money.

Yost released three addi­tional audits Thurs­day of schools where Shye served as treasurer.

Ques­tioned spend­ing included: $75,000 at the Arts Acad­emy in Lorain County, which lacked doc­u­men­ta­tion, or involved cash with­drawals and checks; $15,000 at the Arts Acad­emy in Cleve­land, which lacked doc­u­men­ta­tion, or involved debit with­drawals and checks; and $5,400 at Patriot Prepara­tory Acad­emy in Colum­bus, spent on pay­roll advances to the exec­u­tive direc­tor that were never reimbursed.

“When you’re talk­ing about pub­lic money, it’s almost incon­ceiv­able to me that there is any legit­i­mate rea­son for cash with­drawals of pub­lic money,” Yost said.

Offi­cials char­ac­ter­ized Shye’s alleged actions as out­side the norm, and not a neg­a­tive reflec­tion on Ohio’s mech­a­nism for fund­ing com­mu­nity schools.

“The vast major­ity of char­ter schools have clean audits, ade­quate con­trols, ade­quate over­sight, and the money is safe,” Yost said. “Although this is a large set of wrong­do­ing by one indi­vid­ual, it is one individual.”

Yost is push­ing leg­is­la­tion that requires char­ter school trea­sur­ers to be licensed by the state and allow the state to move against their license if their books become unauditable.

Posted by AP News on May 17 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.