StarShine founder is being sued

Trish McCarty, the founder of a now-shuttered Phoenix charter school who reportedly spent taxpayer money in Hawaii and on “spiritual healers,” is being sued in federal bankruptcy court for fraudulent transfers.

The school, StarShine Academy, closed in 2018 after the Arizona State Board For Charter Schools shut it down for “egregious” financial mismanagement.

The lawsuit was filed in late June. It is a civil suit linked to a bankruptcy case that began in 2016. McCarty, her ex-husband, Stephen McCarty, school

CFO Rich Rose and architect Vernon Swaback, who served as vice president of StarShine, are all named as defendants.

Ryan W. Anderson, an attorney representing the bankruptcy trustee suing McCarty, said this case is “one of the worst” cases of inappropriate use of school funds he’s seen.

“You don’t usually see allegations of misappropriation at this level,” he said.

Bankruptcy court documents detail suspect purchases from 2016 until early 2018, which include $3,500 to a beach hotel in Hawaii and $500 to the “home of the largest quartz crystal in North America, and Master John Douglas, a spiritual healer and clairvoyant.”

McCarty did not respond to requests for comment.

Swaback, an apprentice of Frank Lloyd Wright, according to his firm’s website, declined to comment.

But, McCarty was deposed in April by attorneys.

In the interview transcript obtained by The Arizona Republic, McCarty told lawyers when they asked if she felt she should return money used for personal use, she responded, “Respectfully, I really think StarShine owes me money.”

Bankruptcy case

McCarty is being sued on multiple counts of fraudulent transfer and one count of breach of statutory duties. Swaback is not being sued for fraudulent transfer, but for breach of statutory duties.

This is not a fraud case, Anderson said. Instead, the suit claims McCarty inappropriately spent money for personal use while StarShine Academy plunged further into debt.

Essentially, Anderson said, the suit wants McCarty and others to repay the money inappropriately spent so the bankruptcy trustee can pay down StarShine’s debt.

Anderson could not give a specific amount that the trustee is seeking, but court documents state that McCarty spent at least $1 million in funds over seven years for either personal use or in cash withdrawals.

McCarty: ‘StarShine owes me money’

McCarty’s spring deposition offers a glimpse into the school’s frenetic accounting practices and her rationale for spending school money in Hawaii and on a gym membership.

She told attorneys that spending money for personal reasons worked out because some months, she was forgoing pay.

“I said if I have to use the company credit card to pay for something because I don’t have any money because I haven’t gotten paid, then just keep an accounting of that,” she said she told school accounting officials.

When asked about a 2016 Hawaii trip, she said she was there for “environmental projects” tied to the school. The next month, according to court documents, she was in Great Britain. Again, she told attorneys, the trip was StarShine-related.

“I’m a fellow of Windsor Castle, and one of the things that I do is go meet with educators over there,” she said. “I was very involved with their movement that was something like a charter school movement.”

A monthly membership at a gym? A part of her compensation package, she said, describing it as a package that was “sometimes written, sometimes not.”

Thousands of dollars spent at grocery-store chain Trader Joe’s? That spending was sometimes personal and sometimes for the school, she said.

When asked if she regretted some of the spending, McCarty responded that she did.

“I feel bad that mistakes were happening and that things happened, but I also forgive myself because it was so intense,” she said at one point, referring to the bankruptcy process.

Attorneys asked her if she felt she should pay money back to StarShine.

“Respectfully, I really think StarShine owes me money,” she responded.

McCarty told attorneys she is now retired, but has an education consulting business on the side. On her website, where she is called “Dr. Tricia Cone,” she’s described as a metaphysician and offers “project consulting.”