(The Center Square) – Indiana Attorney General Todd Rokita filed a lawsuit against a consortium of virtual schools seeking more than $154 million.
The suit was filed in Hamilton County Superior Court, just north of Indianapolis, against Indiana Virtual School, Indiana Virtual Pathways Academy, Indiana Virtual Education Foundation and other related entities.
“This lawsuit is historic because it represents the largest amount of monetary damages ever sought by our office following a State Board of Accounts investigation,” Rokita said in a statement. “This massive attempt to defraud Hoosier taxpayers through complex schemes truly boggles the mind. This case demonstrates once again that public servants must remain ever vigilant in our work to safeguard the public treasury from opportunists.
According to Rokita’s office, Indiana Virtual School and Indiana Virtual Pathways Academy operated online charter schools from 2015 to 2019 that were sponsored by the Daleville Community School Corp. Daleville is southwest of Muncie.
Daleville school officials revoked the charters and their sponsorship shortly before the start of the 2019-2020 academic year after IVS and IVPA failed to meet minimum academic standards and fell short of accounting provisions required by Indiana law.
An investigation by the State Board of Accounts found that public funds were misappropriated.
“The State Board of Accounts is committed to creating a culture of accountability where public officials and institutions are held to the highest standards,” State Examiner Paul Joyce said in a statement. “We apricate the attorney general for bringing this action on behalf of the citizens of Indiana.”
The SBOA investigation found that the virtual schools misrepresented the number of students who were enrolled, resulting in an overpayment of more than $68 million in taxpayer funding.
The audit also found the schools wrongfully disbursed more than $85 million in public funds to vendors who were connected to school officials without having any sort of invoice or invoices with no itemized information.
There were also some 900 students who were kicked out of the schools during the 2017-2018 academic year who were automatically re-enrolled the following year, amounting to $34 million in per-pupil funding.
In all, Rokita said he is seeking reimbursement to the state for the cost of the SBOA investigation, as well as other penalties and punitive damages.
He is also asking the court to demand that individuals involved with the virtual schools forfeit “any other ill-gotten gains unjustly and wrongfully received and diverted.”
The matter is also under federal and state criminal investigation.