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Wednesday, August 26, 2020

St. Louis Charter School's Headmaster Pleads in $2.4 Million Fraud

Posted By on Wed, Aug 26, 2020 at 2:12 PM

click to enlarge St. Louis College Prep's former headmaster pleaded to three federal felonies. - GOOGLE STREET VIEW
  • St. Louis College Prep's former headmaster pleaded to three federal felonies.

The former head of a failed charter school has pleaded guilty to federal wire fraud charges in a scheme that cost taxpayers $2.4 million.

Michael Malone, who founded St. Louis College Prep, inflated attendance numbers for years as a way to collect more government funding for the struggling school.

"What the former headmaster did through his deception, repeatedly over many years, was take advantage of the Missouri taxpayers, while obtaining an unfair advantage over the St. Louis Public Schools and other area charter schools," U.S. Attorney for the Eastern District of Missouri Jeff Jensen said in a news release. "This was not a mistake. Evidence proved Michael Malone’s actions were intentional and, unfortunately he got away with it for years.”

Malone, 44, opened the school in 2011 and served as headmaster until November 2018, when he resigned after an internal review and an investigation by Missouri Auditor Nicole Galloway showed he was cooking the books. The school closed in 2019.

As a charter school, St. Louis College Prep was funded through the state Department of Elementary and Secondary Education. The funding is calculated through daily attendance records, and Malone routinely jacked up those numbers to increase funding. At times, those numbers exceeded even the total enrollment by as much as 124 percent.

In an example cited by federal prosecutors, Malone claimed average daily attendance of 326 during the 2016-2017 school years, when only 290 students were even enrolled, much less attending attending every day.

The fraud meant money that rightfully would have gone to St. Louis Public Schools went to the charter school to educate phantom students, authorities say.

"Michael Malone failed more than just students and staff at St. Louis College Prep Charter School," Special Agent in Charge Richard Quinn of the FBI St. Louis Division said in the news release. "By siphoning $2,400,000 from a finite pool of education dollars, he robbed students at other public and charter schools of additional resources they should have received."

Malone pleaded guilty today to three counts of federal wire fraud. He's scheduled to be sentenced by U.S. District Judge Audrey Fleissig on November 30.

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