Two men plead guilty in charter school fraud case

An Australian man and his Southern California business partner who ran a network of online charter schools pleaded guilty Friday to felony charges tied to a massive fraud scheme that siphoned $50 million in education funds from the state to invest in start-up companies and real estate.

Prosecutors called it one of the nation’s biggest fraud cases involving education dollars. The scheme involved buying the information of unwitting students it found through other schools and youth programs to falsely beef up its enrollment numbers and collect public funds.

Sean McManus, 46, entered his plea from Australia via a video call to San Diego Superior Court. He agreed to voluntarily return to the United States as part of his plea agreement.

He and his business partner, Jason Schrock, 44, pleaded guilty to conspiracy to misappropriate public funds and to stealing more than $500,000.

Schrock also pleaded guilty to one count of conflict of interest. Both face up to 10 years in prison. The defendants nor their attorneys could be immediately reached for comment.

Their company, A3 Charter Schools, operated 19 online- only charter schools across California, according to a 235-page indictment filed in San Diego County Superior Court.

As part of their plea agreements, the two men agreed to assist in the return of more than $210 million in assets, which included 13 houses and various shares in third-party companies.

The company paid sports leagues, camps and others as little as $25 per student for information it then used to inflate enrollment, unbeknownst to the students. McManus and Schrock then claimed these students were being served by the A3 Charter Schools and being taught public education from licensed teachers, when the students had no relationship with the charter school, according to prosecutors.