October 10, 2012
JULIE CARR SMYTH
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.