A3 charter school fraud ringleader sentenced to 4 years in prison, fined $18.75 million

One of the two masterminds behind a massive charter school scheme that defrauded the state of California out of tens of millions of dollars was sentenced to four years in prison and ordered to pay $18.75 million in fines in San Diego County Superior Court on Friday.

Jason Schrock, a co-creator of the now-defunct A3 charter school network, pleaded guilty in February to one count of conspiracy to misappropriate public funds and one count of conflict of interest. He has been under house arrest in Orange County since he was arraigned in May 2019.

Because the law requires that Schrock receive credit for the more than 750 days he has spent under house arrest, he will not spend a single day in prison.

At Schrock’s sentencing hearing, defense attorney Knut Johnson emphasized that Schrock had been wholly cooperative during the investigation, turning over hundreds of millions of dollars in assets and thousands of pages of documents to further the investigation.

It was that cooperation that kept Judge Frederick L. Link from handing down a stiffer sentence, the judge said. The case centered on what has been labeled as one of the nation’s largest fraud schemes after taxpayers were fleeced out of $400 million meant for K-12 education. Due in part to the cooperation of Schrock and his co-conspirator, Sean McManus, investigators have recovered $220 million.

“Mr. McManus and Mr. Schrock were thieves. And I don’t like to dance with thieves,” Link said in court Friday. “I think they should be punished. That being said, Mr. McManus and Mr. Schrock came forward and basically divulged everything they could come up with. Without the cooperation of Mr. Schrock and Mr. McManus, we would not be here today with the amount of money that the receiver has been able to recoup.

“Except for that, I would definitely be putting both of these fellows in prison for a significant period of time.”

McManus, the chief executive and president of A3 Education, pleaded guilty in February to two counts of conspiracy to misappropriate public funds. McManus, who is under house arrest in Australia, attended Friday’s proceedings by video link and was informed he would also be fined $18.75 million when he is sentenced in February.

A yearlong investigation by the San Diego County district attorney’s office determined that Schrock, McManus and their codefendants fraudulently obtained hundreds of millions in state school dollars from 2016 to 2019 after opening a network of 19 online charter schools. Three of those schools were in San Diego County.

Prosecutors accused A3 leaders of buying children’s personal information to falsely enroll them in the schools and of providing incomplete education services while taking tens of millions of dollars for personal use. A3 leaders also manipulated enrollment figures across their schools to receive more state funding per student and manipulated school attendance reporting to get more money for time that children were not spending in A3 schools.

So far, nine defendants in the case have pleaded guilty.

The vast majority of the money that has been recovered will go to state and county coffers. The fines paid by Schrock and McManus will be paid to San Diego County. That money is to be earmarked exclusively for programs that directly serve K-12 children across the region. An additional $14 million in restitution was ordered to be paid to the children who were affected by the scheme. The San Diego Foundation will distribute that money. An additional $90 million will go to the state’s Department of Education.

The remaining funds, most of which will go back to the state, will be distributed at a future date.

“Obviously we’re thrilled with the recovery, and we’re thrilled with the fact that there’s so much money that is going to go either back to the state or to local agencies to be able to help K-12,” said Deputy Dist. Atty. Leon Schorr, who handled the case. “Part of the reason the D.A.’s office resolved this case so quickly is because there’s such a need for kids to have supportive services and support in education.”