Ohio investigates 2 in charter fraud case

They are accused of using schools to defraud Fla. taxpayers.

Ohio’s top public accountant is actively investigating the case of two businessmen accused of using charter schools to defraud Florida taxpayers, students and schools — and maybe here, too.

On Friday, Ohio Auditor Dave Yost acknowledged that a probe has been ongoing for a year. Meanwhile, court documents filed this month in Florida indicate 19 Ohio charter schools were overbilled nearly $600,000. Prosecutors and forensic accountants say the money was laundered through 150 bank accounts and shell companies then returned as “rebates” and “kickbacks” to Marcus May, who once ran more than 20 charter schools in Ohio.

In 2012, May used a parent company, Newpoint Education Partners, to open Cambridge Education Group, a charter school operator based in Akron. To increase business in Florida, authorities say he “falsely represented” that his Ohio schools were well-managed. By 2016, prosecutors say he allegedly defrauded Florida and its public schools of more than $1 million.

May has repeatedly declined to speak with the Beacon Journal.

The pattern in Florida seems to mirror transactions in Ohio.

One forensic document in the Florida case details how Ohio schools paid $1.1 million to Apex Learning, a Seattle-based company May used to bill the 19 Cambridge schools in Ohio and 15 Newpoint schools in Florida for online and hard-copy curriculum. Russ Edgar, the lead Florida prosecutor in the white-collar criminal case against May, has produced invoices that show how Apex inflated pricing for furniture and computers to siphon $229,756.57 from Florida’s education system and $456,551.92 from Ohio schools, including four in Akron.

“After the allegations in Florida came to light, Marcus May was immediately relieved of any managerial duties and later of his equity in Cambridge,” John Stack, co-owner of Cambridge, said in a

written statement. He said Cambridge hired a forensic accountant to find out if Apex negatively impacted any Ohio schools. Once the schools were identified, the money was returned.

Prosecutors say bank records show that May spent public funds — some of it provided by parents for stu- dent uniforms and lunches — on exotic trips, jet skis, a mansion mortgage, plas- tic surgery and other personal effects.

May’s four-week jury trial begins Sept. 11.

A month earlier, May’s business associate, Steven Kunkemoeller, was found guilty in the racketeering and fraud case. Sentenced to 55 months in prison, Kunkemo- eller is back in Cincinnati waiting for a Florida judge to say whether he can appeal his jury conviction.

A certified fraud examiner looked at 205 invoices and determined that Kunkemo- eller’s School Warehouse Inc. upcharged the 19 Ohio char- ter schools by $590,644.73. Egregious examples include billing Towpath Trail High School on Market Street $114,730 for computers worth $58,337.30 at CDW.