Charter school founder accused of theft, use of school money on world trips, mortgages, other luxuries

The founder of a charter school company that managed two schools in Jacksonville was charged Monday, along with a business partner, with racketeering and organized fraud allegedly involving 15 charter schools in Florida.

Prosecutors say Marcus May, owner of Newpoint Education Partners, is accused of misusing and co-mingling charter school money, as well as taking excessive payments and “kickback” fees, and spending the proceeds on such things as cruises, numerous trips to foreign countries, plastic surgery, home mortgages and a personal watercraft.

“May obtained more than $1 million of public funds from a pattern of thefts from the state department of education, six school districts and 15 Newpoint-managed charter schools,” said District 1 State Attorney Bill Eddins, in a prepared statement.

In total, Newpoint’s charter schools in Florida received $57 million from the state and from six school districts, including Duval, between 2007 and 2016, the affidavit attached to the charges states.

In Jacksonville, Newpoint ran the San Jose Academy and San Jose Preparatory High schools on Sunbeam Road. Both are now managed by a different company and serve 310 middle and high school students.

An attorney representing May and Newpoint, David McGee of Pensacola, said his client did nothing wrong and that the expenditures were proper because his client earned that money from his companies.

“To the extent that it is legitimate income … he can use the income from his businesses to buy some of the same things other people buy,” McGee said.

The latest charges accompany others filed against Newpoint last year by Eddins, whose district includes Escambia, Okaloosa, Santa Rosa and Walton counties.

“This has been in court for a year and there has been a series of allegations that haven’t held water so far,” McGee said.

The new charges go beyond last year’s indictment, said Russell Edgar, assistant state attorney on the case, because they involve more charter schools and counties. “We thought this was not an isolated case,” he said. “It appears to be a pattern throughout the state.”

He said May used Newpoint to convince parents and others to start charter schools, form nonprofit corporations and take positions on school governing boards. (Charter schools are public schools run by non-public boards rather than elected school board members.)

These charter board members had little or no experience operating schools or handling bookkeeping, payroll or facilities, according to the affidavit.

May, through Newpoint, charged the charter schools a management fee of 18 percent of whatever the state sent the schools in per-student funding, plus his expenses, the affidavit says.

May hired a bookkeeping company for all the schools and directed that company to weekly withdraw all but $1,000 from each charter school’s bank account and to deposit those funds into a single Newpoint bank account.

The affidavit said such co-mingling of funds is against Florida law and was done without the knowledge of charter school board members.

According to the affidavit, May used his own companies to buy and then sell items and services to the charter schools at hundreds of thousands of dollars over the actual cost. He had some of his companies pay “leases” to another of his companies, which in turn paid off mortgages and downpayments on his personal homes.

He also had the charter schools lease furniture, equipment and computers from a company he and a partner owned. That company within a couple days then paid “kickbacks” to May or to Newpoint for no apparent reason, the affidavit said.

In 2014, his partner’s company, called School Warehouse, received $375,000 from Newpoint schools in Duval and Pinellas counties which had paid markups of 165 percent over retail prices.

School Warehouse sent $175,000 of that to a Fifth Third Bank account to pay the partner’s home mortgage and the rest, $200,000, went to another related company, which transferred $25,000 to a real estate company owned by May and $175,000 to First Merit Bank , where it was applied to a balance on May’s home equity credit line, the affidavit said.

In 2015, School Warehouse received more than $225,000 from Newpoint’s charter schools, and School Warehouse wired $100,000 to another real estate company owned by May, the affidavit said.

A similar kick back scheme involved Apex Learning, a Washington online learning company. Beginning in 2012, Apex charged Newpoint’s charter schools an “elevated” price for online curriculum and materials and “rebate” back to Newpoint — not the schools — the difference between the elevated and the actual price, the charges say.

That way, Apex rebated to $23,785 to May from Duval, part of more than $700,000 in rebates from Apex, the affidavit says.

The affidavit also alleges that charter schools paid for “fictitious” furniture, equipment and computers from companies linked to May.

When Newpoint-controlled charter schools closed, many missing items listed on inventories couldn’t be found. In some cases, there was no paperwork proving an item had been delivered. In other cases the paperwork shows the school paid a lot more than the item’s price, Edgar said.

Also, Newpoint-managed charter schools won $3.7 million in charter school program grants from the state, based on how many students were supposed to attend the schools. The affidavit lists four cases of over-estimated enrollment for bigger than usual payments.

For instance, in 2013, Newpoint said its Duval school would have 225 students and it took $350,000 from the state. The school enrolled just 54 students, the affidavit states.

About 85 percent of those grant funds, or $3.2 million, reimbursed Newpoint schools for invoices submitted by May-selected vendors “at grossly marked-up prices,” the affidavit said.

The affidavit says parents were overcharged for school uniforms and that uniform, lunch and activities fees went into a bank account for May.

Some of the charges linked to one of May’s companies included Visa-paid trips to Amsterdam, the British and the U.S. Virgin Islands, Brussels, Cancun, China, France, Hong Kong, Iceland, India, Japan, Los Cabos and Italy.

It is unclear when this case will be heard. A previously set August court date will likely be postponed in light of the new charges, McGee and Edgar said.

Denise Smith Amos: 904-359-4083