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Employee Embezzled From Ohio Charters, Feds Say

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A one-time treasurer for a number of Ohio charter schools has been charged with embezzling more than $470,000 in federal funds from those schools over a six-year period.

The U.S. Attorney's Office of the Southern District of Ohio on Thursday accused Carl W. Shye, Jr., of having defrauded a group of charter schools, in a case that authorities said was based on a joint investigation by state and federal authorities.

The case was triggered by Ohio Auditor of State Dave Yost, whom federal officials said last year noticed a pattern of financial irregularities at schools served by the treasurer, then notified the Federal Bureau of Investigation. After combing through the charter schools' finances, investigators issued 62 "findings of recovery" spanning a period over the past 10 years, totaling $1,012,490, said Carter M. Stewart, the U.S. Attorney who announced the case againt Shye.

The schools involved in the case included the former George Washington Carver Preparatory Academy, in Columbus; the former Legacy Academy for Leaders & the Arts, in Youngstown; the former NuBethel Center of Excellence and New City Community School, both located in Dayton, federal officials said.

Public schools, including charters, receive federal funds through a variety of channels. The case against Shye, 57, put forward in a one-count "bill of information," does not spell out what types of federal funds are alleged to have been embezzled, identifying them only as grants, contracts, subsidies, and other types of monetary aid.

Embezzling from programs receiving federal funds is a crime that carries a penalty of up to 10 years in prison, with a fine of up to $250,000, plus three years of supervised release. The feds are also seeking a forfeiture of $472,579.90, the amount they said they could trace "the gross receipts Shye obtained" through his alleged crimes.

"Carl Shye has run amok with taxpayer dollars for a decade, but his run ends today," said Yost, the state's auditor, in a statement. "I am proud to see the culmination of countless hours of work and the strong partnership between the auditor of state's office and law enforcement to stop this crime against the public."

The case comes at a time when a number of charter schools across the country have come under scrutiny from either the public or authorities for alleged financial irregularities, involving accusations of conflicts of interest and the misuse of funds. (See my colleague Jason Tomassini's recent roundup of some of those charter school woes on Marketplace K-12.)

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