Charter school founders accused of money laundering, rackete
The state Department of Justice has filed a legal claim against Norm Donohoe and Tim King, accusing them of engaging in money laundering and racketeering between 2007 and 2010. The state expects them to reimburse the $17 million, pay another $2.7 million in breach of contract penalties and reimburse its attorney’s fees and other costs.
Donohoe and King, operated at least 10 charter schools, mostly under the AllPrep name, through a Clackamas-based nonprofit called EdChoices.
In addition to Sheridan, they signed agreements with school districts in Baker City, Burns, Estacada, Marcola and Sisters. They also enrolled students from all parts of the state in online programs.
Prosecutors allege Donohoe and King submitted false records about how many students were enrolled and how they were spending state money.
Donohoe claims the accusations are untrue, but declined to go into detail. He said he doesn’t know how to reach King, who resigned shortly after the state launched its investigation in the spring of 2010, and filed for bankruptcy last year.
The Sheridan AllPrep charter will be continuing, despite the legal action.
“This does not impact our operation at all,” said Principal Jesse Eisenschmidt. “As soon as we learned about the discrepancies with student reporting, we separated ourselves from Tim King and started fresh. We continue to operate normally.”
The state provided startup grants of up to $450,000 for new charter schools. The state Department of Education also provided about $6,000 a year for each student enrolled, relying on the charter school operators to document those numbers.
In the EdChoices case, the state says those records were “erroneous, false and misleading.” Though the schools did educate some students, the state wants the men to repay all the money their schools received in grants and per-student funding, on the grounds all of it was granted under false pretenses.
Some of the EdChoices charters have ceased operations. Others, like Sheridan AllPrep, are continuing under new auspices.
When Sheridan AllPrep was launched in May 2009, it was granted a greater degree of independence than other AllPrep academies. That better prepared it for the transition.
King, who once taught at Rex Putnam High School in Milwaukie, developed the AllPrep program in 2007. Previously, he headed a charter school alliance in the North Clackamas School District, where an audit later documented lax oversight.
According to the AllPrep website, member academies offer computer-accessed curriculum that meets state standards in an entertaining, challenging and interactive fashion.
Each student has the option to use a loaner laptop. Technical support comes from the student’s teacher and the staff at OdysseyWare, which provides the software.
Students use the Internet to access online curriculum and send their completed work to their assigned teacher for evaluation. Twice a month, the teacher makes a home visit for one-on-one educational enrichment.
In Sheridan, Eisenschmidt said, “Things are going real well. “We have received great feedback from parents about individual curriculum programs.
“I’m very happy with how things are going. It’s been a great school year so far.”
There are 64 students currently enrolled in Sheridan AllPrep, and Eisenschmidt said efforts are under way to recruit more. The staff consists of a principal, two full-time teachers, one part-time teacher, a business manager and a registrar.
The Associated Press contributed to this report.