INDIANAPOLIS – A federal grand jury has returned an indictment charging three Indiana men for their alleged roles in a conspiracy to defraud the Indiana Department of Education (IDOE) through their operation of two online charter schools, Indiana Virtual School (IVS) and Indiana Virtual Pathways Academy (IVPA).
Tom Stoughton Sr., 74, of Carmel, Phillip Holden, 62, of Middletown, and Percy Clark, 81, of Carmel, were all indicted on one count of conspiracy to commit wire fraud and 16 counts of wire fraud. Stoughton and Clark were also indicted on several counts of money laundering.
Also, Christopher King, 61, of Green Fork, has entered a plea of guilty to conspiracy to commit wire fraud.
According to the indictment, between the summer of 2016 and 2018, the defendants allegedly submitted false numbers to IDOE representing the enrollment of over 4,500 students that they knew were not attending their two schools. Like other public and charter schools, IVS and IVPA received funding from the State of Indiana based on the number of students a school claimed to be enrolled.
In general, the more students attending, the more funding IVS and IVPA receive from the State of Indiana. The indictment alleges the defendants manipulated this process to inflate enrollment numbers and ultimately receive more funding. As a result of these false submissions, IDOE paid more than $44,000,000 to IVS and IVPA.
The U.S. Department of Justice Attorney’s Office for the Southern District of Indiana says the trial for the three defendants who have not pleaded guilty will be scheduled later. If convicted, each defendant faces between 10 and 20 years in federal prison per count.
