While the California Charter Academy scandal blew into San Bernardino County like a lion in 2004, thirteen years later it is on the verge of going out like a $12 million lamb.
Charles Steven Cox founded the California Charter Academy in 1999, using the misplaced faith of many parents that he would create a good Christian-oriented learning environment using public money and the sponsorship of the Snowline-Joint Unified School District. He then utilized the enthusiasm garnered from that formation to get Snowline to charter another academy and obtained two more charter sponsorships, one from the Orange School District in Orange County, and one from the Oro Grande School District to expand the academy into the largest charter school operation in California, with 51 campuses located throughout the state, with one as far removed from Southern California as San Joaquin County.
Simultaneous to his founding of the non-profit California Charter Academy, Cox created Educational Administrative Services Corporation, a for-profit company which was then hired by all four charter schools to manage the day-to-day operations of the charter schools and provide academic supplies such as books, paper, pens, pencils, desks, chairs, projectors, computers, etc. Cox inspired Tad Honeycutt, who in 2000 successfully ran for a position on the Hesperia City Council and in time acceded to the position of mayor, to work with the California Charter Academy as well and create his own set of companies, Maniaque Enterprises and Everything For Schools, which like Educational Administrative Services Corporation delivered educational materials and services to the non-profit charter schools at a profit.
Those for-profit companies greatly inflated the prices they charged for delivering those services and supplies. In some cases, educational materials that were paid for by the charter schools were never delivered. Instead, the money was used for purchases of luxury automobiles, accommodations in Las Vegas, at Disneyland and the Disneyland Hotel, studio musical recording equipment, spa visits, fishing trips, a boat, and jet skis. Cox hired several of his family members into what were essentially do-nothing clerical and non-productive administrative positions with the charter academies, in most cases providing them with four separate paychecks simultaneously.
By 2003, teachers at several of the schools were going public with accounts of how students’ educations were being neglected and books and other educational materials were not being provided. In 2004, the superintendent of the California Department of Education, Jack O’Connell, suspecting financial irregularities, launched an investigative audit into California Charter Academy. In August 2004, four years after California Charter Academy’s creation, it ceased operations abruptly, throwing teachers out of work and forcing students to hurriedly matriculate back into public schools.
The audit eventually showed that some $24 million was squandered on non-education related activity, and that Cox made $5.5 million in payments to Honeycutt’s for-profit subsidiary without a vote by the academy board to approve the disbursements. Cox’s take was more substantial, around $17. 5 million.
In 2007 Cox and Honeycutt were indicted on a combined total of 117 felony charges of misappropriation of public funds, grand theft, tax evasion and filing false tax returns. But the case has languished for ten years and has yet to go to trial.
This morning, in the courtroom of Superior Court Judge Jon Ferguson, San Bernardino County Chief Assistant District Attorney Michael Fermin intimated that some form of plea arrangement may be in the works. While the case is scheduled for a pre-trial hearing on December 1, it now seems that rather than Cox being tried on the 56 counts of misappropriation of public funds and matching 56 counts of grand theft and Honeycutt likewise having to stand in against 15 counts of misappropriation of public funds and a corresponding 15 counts of grand theft, the case just might end with a whimper rather than a bang. Things are being played close to the vest. However the Sentinel has learned that a resolution might come by virtue of the defendants agreeing to return some $11 million to $12 million they have salted away in domestic bank accounts as well as in institutions in Spain, Majorca, the Virgin Islands, Vanuatu, and Argentina.
Without going into detail, Fermin told Judge Jon Ferguson, “We are close to reaching an agreement.”
If the money is returned, Cox might avoid the potential maximum 64-year prison sentence he is facing and do as little as four years in a minimum security setting. Similarly, Honeycutt could purchase his way out of a possible 20 year sentence and have to remain incarcerated for only two years.