A former executive of the defunct New School for Enterprise and Development charter school has been targeted by a federal grand jury probing allegations of fraud, a law enforcement source said.
The grand jury is also investigating fraud allegations surrounding the Jos-Arz Therapeutic Public Charter School, which was shut down earlier this year, according to a letter from the U.S. Attorney’sOffice.
Former New School president Charles Tate and at least one other former executive have been notified that they are targets of the grand jury investigation, the source said.
The source spoke on condition of anonymity because grand jury proceedings are closed.
Prosecutors send “target letters” when they think they have enough evidence to obtain an indictment.
Tate’s lawyer, Nate Muyskens of Troutman, Sanders LLP, said his client “would love to cooperate” with the grand jury investigation, but he declined to make any other comment.
New School lost its charter in June after reports surfaced that staff at the school were doctoring grade transcripts to make it appear as if the school was meeting its academic goals. There were also questions raised about Tate’s pay. A trustee of the school’s board, he was paid an annual salary of $100,000, and $500,500 for the years he spent working to open the school.
Nearly 90 percent of New School’s 300 students lived in poverty.
The school received about $30 million in public dollars before its charter was pulled.
A month before New School’s charter was canceled, federal authorities raided it, carting off more than a dozen file cabinets.
No one has been targeted in the Jos-Arz investigation, the source said.
The school was given $15 million in D.C. tax dollars based on projections of its student enrollment — projections the school never met.
There was also controversy the school’s operators tried to sell the school’s property — which was paid for at least in part with public dollars.
About 190 students attended the school, which was supposed to serve the emotionally disturbed.
The criminal probe of the New School and Jos-Arz was confirmed by a Dec. 8 letter from Assistant U.S. Attorney Roy L. Austin Jr.to District of Columbia Chief Finance Officer Natwar M. Gandhi.
The letter, obtained by The Examiner, states that Austin and investigators from the D.C. Inspector General’s Office and the U.S. Department of Education “are presently investigating allegations of financial fraud concerning” the two schools as well as the public agencies that were supposed to monitor them.
Austin is leading a separate grand jury investigation into the D.C. Board of Education’s charter school office. Jurors have been told that former charter school executive Brenda Belton used a series of companies to take money for herself, her family and her friends.
One of the companies, Equal Access in Education, sent invoices claiming it had monitored several charter schools, including Joz-Arz. Grand jurors have been told the work was never actually done, sources said.
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