© 2024 KOSU
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

State Investigation of Epic Expands to Chief Financial Officer, Board

Whitney Bryen / Oklahoma Watch
A sign is seen outside of 50 Penn Place in Oklahoma City, where Epic Charter Schools leases 40,000 square feet for administrative use.

A state investigation into Epic Charter Schools has expanded to include the school’s chief financial officer and four current or former board members, according to a search warrant filed in Oklahoma County Wednesday.

In the affidavit for the search warrant, an Oklahoma State Bureau of Investigation agent alleges Epic has been using state-appropriated funds to pay for students’ extracurricular expenses through independent vendors but reported those expenditures to the state as “instructional services,” which the OSBI agent alleges is fraud. 

Named in the affidavit are Josh Brock, the school’s CFO, who made the purchases, as well as Doug Scott, Travis Burkett, Mike Cantrell and Peter Regan, who are being investigated for allegedly neglecting their duty as board members to oversee the school’s operations.

The search warrant was first reported by The Tulsa World.

The OSBI on Wednesday seized a laptop and bank statements from OKC Storm Athletics, a Christian sports vendor for home-school students, according to its website. Epic pays vendors for student activities through what Epic calls its “Learning Fund.”

The affidavit is the latest in an ongoing investigation into financial wrongdoing at the state’s largest virtual charter school.

Epic has denied any wrongdoing, and on Wednesday afternoon issued a statement saying, “Epic and its founders will continue to cooperate with investigators, who have now been probing the school for more than six years. It is important to note that no charges have ever been filed.We are confident that the end result of this investigation will be as it has always been – no finding of wrongdoing.”

Epic is the only virtual school in Oklahoma that uses a “learning fund’ – essentially a portion of each student’s state funding ($800 to $1,000) that is set aside to be used on curriculum, a laptop rental, art supplies, workbooks, and other items of the family’s choosing. Families also use the funds on a variety of extracurricular activities, like club sports, martial arts, dancing or summer camps.

Parents don’t actually receive the money directly but instead request a purchase from Epic, which then pays the vendors directly. The school now has more than 1,200 vendors.

The learning fund is a big recruitment tool to attract families, and families who refer new students are rewarded with an additional deposit into their student’s fund.

According to the affidavit, Epic in 2012 was advised by an attorney for its sponsoring school district at the time, Graham-Dustin Public Schools, that using the learning fund for extracurricular activities when the students received no elective credit would violate state law.

David Chaney, a businessman who co-founded the school, then opened a checking account for the learning fund and transferred state funds to it, which Brock used to pay for students’ extracurricular activities, the affidavit states. Those purchases did not appear on Epic’s general fund payment register and were reported to the state as “instructional services.”

Rebecca Wilkinson, executive director of the Statewide Virtual Charter School Board, told the OSBI agent instructional expenditures “must be a course supported by a teacher of record, a recorded grade and included on the transcript,” the affidavit states. In many cases, these weren’t. The agent cites a statute he says is evidence the school committed fraud.

The agent in the affidavit accuses Chaney and Brock of concealing fraudulent expenditures “by disguising the payments as instructional services” and falsifying corporate records.

The OSBI agent reported at least two instances when Epic used vendors who were convicted felons.

The OSBI is also investigating whether Burkett, Cantrell, Regan and Scott neglected their duties as board members in violation of the law. Cantrell, head of an oil and gas company in Ada, is a current board member and Scott, a Tulsa attorney, is chairman. Burkett and Regan are no longer on the board. 

This search warrant is the second in as many months filed by the OSBI. In July, the agents seized an Epic teacher’s computer and cell phone in search of evidence related to alleged embezzlement of state funds and obtaining money under false pretenses, including through the use of “ghost students” who didn’t actually receive instruction through the school. 

Oklahoma Watch is a nonprofit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. More Oklahoma Watch content can be found at oklahomawatch.org.

The school’s co-founders, Chaney and Ben Harris, split profits of $10 million between 2013 and 2018, that affidavit states.

The OSBI’s investigation into Epic has been ongoing since 2013. When it’s complete, the agency is expected to present its findings to the Oklahoma County district attorney for possible filing of criminal charges.

In addition, the school is undergoing an investigative audit by the State Auditor & Inspector, and at least two federal probes – by the Federal Bureau of Investigation and the U.S. Department of Education.

The school is also facing a potential lawsuit by several former teachers, who say they were pressured into withdrawing and re-enrolling students to manipulate enrollment to improve the school’s report card grade.

Oklahoma Watch is a nonprofit, tax-exempt, 501(c)(3) corporation whose mission is to produce in-depth and investigative journalism on public-policy and quality-of-life issues facing the state.
KOSU is nonprofit and independent. We rely on readers like you to support the local, national, and international coverage on this website. Your support makes this news available to everyone.

Give today. A monthly donation of $5 makes a real difference.
Related Content