For Immediate Release:
Oct. 11, 2016
COLUMBUS — Concept Schools, which oversees a chain of Ohio charter schools, abused public money by siphoning millions of dollars out of the schools and into a related real estate company, according to a complaint against the schools unveiled today.
The real estate company, New Plan Learning, often saddles schools with long-term, financially irresponsible leases, then uses the profits to expand its network of schools. The scheme is aided by people who sit on schools’ governing boards. Many of these board members have ties to New Plan Learning.
Robert Amsterdam, whose law firm conducted the investigation, detailed the findings at a news conference and announced that he is turning them over to Ohio Auditor David Yost and members of the State Board of Education.
“The complaint calls for Auditor Yost to conduct a full investigation into the documented fraud and conflicts of interest,’’ Amsterdam said. “Only through a forensic audit can we determine whether state and federal funds entrusted to these entities are being used for the intended public purpose—that of serving the best interests of students rather than fraudulently benefiting private interests.’’
Sandy Theis, ProgressOhio’s Executive director, joined Amsterdam and said, “I think these schools will finally get the scrutiny they deserve. The days of Ohio Department of Education cover-ups are over.’’
Concept Schools manage more than 100 charter schools, including schools in Cincinnati, Cleveland, Columbus, Dayton, Lorain, Toledo, Springfield and Youngstown. The Ohio schools operate under the names Horizon Science Academy or Noble Academy.
The complaint asserts that Concept Schools, its directors, employees and vendors are connected to the Gulen Organization, a network of schools and affiliated businesses headed by Fethullah Gulen, a Turkish cleric living in exile in Pennsylvania. The complaint details a pattern of insider deals and elaborates how a close network of Turkish men makes decisions that benefit the Gulen Organization at the expense of Ohio school children.
The findings include:
- Concept Schools’ founders created an affiliated company, New Plan Learning, to acquire real estate for Concept charter schools. New Plan Learning charges excessive rents, with some four times the market value. The profits are used to buy new buildings for new Concept charter schools that are also required to pay exorbitant rents. And the cycle continues as Concept’s footprint expands across the Midwest;
- Each Ohio charter is governed by a non-profit board of directors that is legally required to fulfill fiduciary duties of due care and loyalty to the charter school they serve. Instead, school boards systematically make decisions that favor Concept Schools and New Plan Learning over their own students;
- In 2011, New Plan Learning expanded its capital significantly by applying for a $33 million bond to purchase, refinance, and/or renovate four Concept schools, including the Horizon Science Academies in Dayton, Toledo and Springfield. The schools now have abusive leases not set to expire until 2041;
- New Plan Learning’s current three-member board has confused lines of loyalty. Board member Savas Kaya has served on the boards of Horizon Science Academy Toledo (2006), Horizon Science Academy Columbus (2006), Horizon Science Academy Cincinnati (2006-present); Horizon Science Academy Dayton (current); Horizon Science Academy Dayton High School (current)—all schools paying rent to New Plan Learning;
- The schools systematically redistribute funding among county and municipal tax boundaries to forestall insolvencies. Between the exorbitant rents paid to New Plan Learning, the management fees to Concept, and the forced payments to other preferred Turkish vendors, the Ohio Concept schools have historically operated at a negative net position throughout their histories;
- To hide its periodic insolvency, Concept funnels money among its schools to cover for its exploitative rental fees. For example, Horizon Science Academy Columbus Elementary moved over 1.4 million dollars out to other failing Concept schools in 2015. This was one-fourth of the school’s revenue that year, Horizon Science Academy Columbus Elementary ended up operating at a negative $1.9 million position for that year;
- Concept Schools pay to bring over hundreds of Turkish nationals on H-1B visas to fill teaching and administrative positions that they claim cannot be filled by qualified US citizens. In fact, Concept and its schools have paid for 760 H-1B visas to bring Turkish nationals to Ohio. With each visa application costing between $2,000-$4,000, that’s over $3 million in Ohio public funds intended to educate students.
In 2015, the Republic of Turkey hired Amsterdam & Partners to conduct a global investigation into the Gulen organization. The firm argues that Gulen was the mastermind of an unsuccessful coup attempt in Turkey last July. Amsterdam’s work has led to ongoing investigations into charter schools in California and Texas.
Concept Schools have been the subject of state and national investigations. Two years ago, the FBI raided Concept Schools Chicago headquarters and schools in three states, including Ohio. The investigation is on going.
In 2014, ProgressOhio organized a panel of teachers who worked for the Dayton Horizon Science Academy to testify before the state school board. They reported witnessing test tampering, sexual misconduct in the classroom and unqualified teachers of Turkish decent. The Ohio Department of Education said the teachers’ allegations were too old or too vague to confirm them but ODE ignored newer, more detailed information that surfaced after their testimony.
You can read more about ProgressOhio’s reporting on Concept Schools here.