Second charter school executive sentenced in $2.5M enrollment scheme

Joann Vega and two other executives at the now-closed Discovery Creemos Academy charter school knew they were in financial trouble during the 2016-17 academic year.

Enrollment was falling at the K-8 Goodyear charter school, and there were concerns about keeping teachers employed and classrooms open for students.

The three orchestrated an enrollment-inflation scheme to keep $2.5 million in state and federal tax dollars flowing into the school from 2016 to 2018, court records show.

Eventually, they were caught and each admitted to the fraud.

Vega on Wednesday became the second school executive sentenced in the case. Maricopa County Superior Court Judge Jay Ryan Adleman ordered Vega to serve four months in Maricopa County Jail and five years of supervised probation after her release.

Vega, according to court records, suggested the school use "placeholder students" to inflate the school's enrollment. The hope was that the made-up students would eventually be replaced by real students, but that never happened.

Vega denies she was the mastermind behind the fraud but admitted to participating in it. 

Mary Harriss, an assistant attorney general, was seeking a 3 ½ year sentence for Vega, saying the scheme "would not have been accomplished if all three (defendants) had not worked together." 

Vega's attorney, Ariel Jeter, asked that her client only be sentenced to probation, adding that her boss, school CEO Daniel Hughes, pressured her into participating.

The judge said Vega needed to serve time behind bars because the fraud "did damage to other students in every corner of the state."

But he noted there were several mitigating factors warranting a lesser sentence, including Vega having no criminal record and that she cooperated with the Attorney General's Office.

Vega also brought $1,500 to court as an initial installment for restitution of the $2.5 million the school fraudulently received. She and the two other executives agreed to repay that amount as part of their plea deals.

Hughes is scheduled to be sentenced Nov. 16. He faces a presumptive sentence of five years in prison. 

Adelman last week sentenced Harold Cadiz, the school principal, to 3 ¾ years in prison.

The Attorney General's Office found that the three began the scheme after enrollment had dropped by 191 students to 461 kids in 2017. 

Cadiz created fraudulent student and family information and Vega then entered those records into a registration portal with the Arizona Department of Education, according to the Attorney General's Office.

The fraud continued into the next year, when Hughes directed Cadiz to create 150 "Casper kinders," a reference to ghost students named for the comic book character. At one point, the school had reported 453 fake students, records show.

Hughes and Cadiz had no experience running a school prior to taking over Discovery Creemos in 2015, records show. Neither one had a college degree, and they had previously provided janitorial service to the school, also called the Bradley Academy. Vega has a high school education.

The Arizona State Board for Charter Schools, which regulates the state's 500-plus charter schools, in June 2017 unanimously agreed to allow Discovery Creemos to continue operating for at least 20 more years despite concerns about the school's academic and financial performance.

A few months before Discovery Creemos Academy closed in January of 2018, Hughes assured the Charter Board that he would turn around the school. Discovery Creemos shut its doors after its 100th day of classes, essentially assuring it would get as much state money as possible before it closed.

The Charter Board issued a statement Wednesday saying "justice has been served."

The Charter Board, following the failure of Discovery Creemos, sought and obtained legislative approval to close charter schools with poor finances.

"This expansion of our authority will help the board ensure that all charter schools in our portfolio are not only academically and operationally sound, but also financially stable," the board's statement said.

Records recently obtained by The Arizona Republic show the Charter Board has placed at least 87 schools on "intervention," the first step toward disciplining and potentially shutting down a school because of financial problems.

Have a tip on charter schools or other investigative stories? Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478 or on Twitter @charrisazrep. 

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