CLEVELAND, OH (WOIO) - A large scale investigation is underway into the management company behind more than 100 charter schools across the country. That includes six in the Cleveland area.
Locally, they operate as Horizon Science Academy or Noble Academy and investigators say there were insider deals going on that locked the schools into some long-term, and abusive deals all for private gain.
Their students are successful, as is evident by the millions of dollars in scholarships awarded to kids graduating from Horizon Science Academy on S. Marginal. But investigators say the Chicago operators behind the charter school management company, Concept Schools, were also bringing in millions, in insider deals.
"In respect to Ohio, we have found and identified a new marker, and that new marker is what we call the closed loop leasing scam," said Robert Amsterdam, partner in the firm that filed a complaint against Gulen Charter Schools.
Amsterdam's law firm says an exiled Turkish cleric, Fethullah Gulen, stacks the boards of these schools with like minded people, then buys up properties for these schools with its real estate arm.
"New Plan Learning negotiates an extremely high rent to the charter school in leases that are noncancelable, including 2-4 rental escalation clauses, and requires the school to pay for renovation and maintenance," Amsterdam said.
Some of these leases are extended for 30 years. In all, Amsterdam's complaint lists $19M in profits from these schools. Amsterdam says the Gulen organization made it difficult for the state to detect money being moved around to keep the schools solvent while they were paying double, triple, even quadruple rent.
"With some schools borrowing and loaning the same amounts to different schools. It becomes almost incomprehensible," Amsterdam said.
The investigation's findings were turned over to the State Auditor, David Yost. They're asking for a proper investigation into the cleric's organization. This is the same organization that is under investigation for a Visa scam, which these attorney's say cost Ohio taxpayers $3M, and 700 American teachers their jobs.
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