JACKSONVILLE, Fla. – The future of two for-profit charter schools in the Jacksonville area is unknown after the school's management company was accused of grand theft, money laundering and aggravated white-collar crime.
Newpoint Education Partners, which operates the San Jose Academy and San Jose Preparatory School in Jacksonville, was indicted May 5 by a grand jury in the Florida Panhandle.
According to the indictment, Newpoint is accused of fraudulently billing different vendors hundreds of thousands of dollars for supplies, equipment, and services. Prosecutors said Newpoint was working with vendors to launder the stolen money through multiple bank accounts to conceal the criminal activity and has been going on since 2011.
No employees of the company have been charged with crimes.
Charter schools use taxpayers funds and operate under individual school districts, but are free of some of the restrictions and mandates of public schools. Newpoint collected millions in public education funding annually for running several schools in at least three Florida counties.
One of Newpoint's schools in St. Petersburg, Windsor Prep Academy in, ran up a $1 million deficit and paid out $300,000 in unexplained consulting fees, Tampa television station WFLA reported. The school also had to return a $75,000 grant because the company’s managers couldn’t tell authorities how the money was spent.
Two other schools in Pinellas County are in similar trouble: Newpoint Pinellas Academy and Newpoint Charter High School. The director of Pinellas County's charter schools and home education, Rick Wolfe, ordered a corrective-action plan on Feb. 23, and the two schools were notified. The company had 30 days to submit that plan.
On May 8, the company sent out letters to parents of the two Pinellas County schools saying that a nonprofit organization called Alliance Education Services Inc. took over managing the two schools. It says that Alliance had also acquired Newpoint Education Partners.
According to the company's website, “Through this acquisition, Alliance has assumed all the assets and responsibilities of Newpoint including all school management agreements. Alliance currently supports several K-8 schools in Florida and North Carolina, and recently has been approved to open a new K-8 school in Hillsborough County.”
When the indictment came down shortly after the planned acquisition, Alliance pulled out of the deal.
WFLA learned that Newpoint operated charter schools in six counties and has withdrawn from its contracts voluntarily or has been terminated by four of those schools districts.
The last two schools open under Newpoint’s management are in Jacksonville: San Jose Academy and Preparatory.
Laureen Rick, public information officer for Duval County Public Schools, said the district is fully aware of the charges against the company. The district looked into the two Newpoint schools here found them to be in good financial shape, but added it will keep a close eye on the company.
With allegations of criminal activities, will Newpoint still manage the schools in Jacksonville?
"Obviously, contracts are written (to) allow each side to get out or stay in depending on what the needs of the party are," said Richard Kurtz, an attorney not affiliated with the case. "There's often (what's) referred to as good-character clauses. If they find out that there's been some sort of fraudulent activity or something's being improper or something that's going to reflect poorly on Duval (County), then I think they can probably pull out."
Kuritz added that if the company does pull out, there shouldn't be a problem finding another management company to take over.
"At this point, I see management companies knocking on their door saying, 'Hey, if you can get out of the contract, we'll take over and make it easier so you don't have bad publicity,'" Kuritz said.
School leaders call for emergency meeting
School leaders called for an emergency meeting Thursday night to figure out what they need to do if Newpoint isn't allowed to operate in Florida.
School board members made it clear that parents don't have to worry about the doors closing. They said they will not end their contract with Newpoint because they haven't had any problems, but they will be coming up with a plan in case anything changes.
Eileen Quinlan with Newpoint Education Partners spoke at the public meeting about how the schools will be affected by the indictment.
"We are still under an agreement, a management agreement, to support the school. And we will continue to do so as we have been thought this entire time period to support San Jose in the same manner," Quinlan said.
Quinlan told board members that the indictment is vague and the nature of the charges have not been detailed, but she said they could rest assured that Newpoint's attorney will be vigorously looking into the charges.
"With everything's that come out, why not turn to a different company? Why keep this company when this has come out? Because they are doing an excellent job with us and we are proud of that," said Bonnie Arnold, chair of the San Jose charter schools board. “I think it’s a shame, but I don’t know the facts, so I don’t know if it will end up being dismissed or something will come out of it and our focus is here and we haven’t had any issues.”
But board members aren't waiting for the results of the indictment, they are coming up with options in case they need to drop Newpoint.
"They haven't been convicted of anything. We are uncertain of the outcome. We want to make sure they do their due diligence and make sure we are doing what is within the confines of the contract and the agreement and ensure we are following all proper policies and that means putting a plan B into place," said Amy Printy, director at San Jose charter schools.
The contract with the charter schools is supposed to run until 2018. Right now, the board members said they aren't worried about being affected by the indictment, and they have the full support of parents and teachers to handle the situation.
“I am confident in our school and what we’ve done and in my board and their oversight of the company financials and the school financials, so I am really confident we can come to a solution that will keep us open and keep our kids here and staff here for a long time to come," Printy said.