The founder and former headmaster of a failed charter school pleaded guilty to three counts of wire fraud in connection with a scheme that is said to have cost taxpayers in Missouri as much as $2.4 million. The 44-year-old St. Louis resident is scheduled to be sentenced on Nov. 30. Each count of wire fraud carries a maximum custodial sentence of up to 20 years in a federal prison and a fine of up to $250,000. The guilty pleas were announced on Aug. 26 in a statement released by the U.S. Attorney’s Office for the Eastern District of Missouri.

Audit prompts headmaster’s resignation

The charter school at the center of the case was opened in 2011 in St. Louis. The man served as the school’s headmaster until his resignation in November 2018. He left his post after a state auditor uncovered financial irregularities. The school charged no tuition and received its funding from the Missouri Department of Elementary and Secondary Education. The man has admitted to defrauding the agency by artificially boosting the school’s enrollment figures. The school closed its doors for good in 2019.

State paid to educate “phantom” students

According to federal prosecutors, the man inflated the school’s actual enrollment figures by up to 124%. During the 2016-17 school year, he told state officials that 326 students had been enrolled. Prosecutors say that only 290 students were enrolled, and far fewer actually showed up to classes.

Fraud cases are usually settled before trial

Experienced criminal defense attorneys will likely not be surprised to learn that this case was resolved before it went to trial. The evidence in white-collar crime prosecutions is usually compelling, and the penalties are severe. This is why attorneys might suggest pursuing a plea agreement at the negotiating table. During these negotiations, attorneys may seek a more lenient sentence by telling prosecutors about their client’s genuine remorse and desire to make restitution.