XYZ co-founder sentenced for misusing public funds

Funny, how just a few substitutions of XYZ, ABC, and DEF makes this article very relevant, and eerily familiar, especially the part highlighted at the bottom.  I wonder if they pondered giving out a $250k loan?!?

The founders of a XYZ charter school were sentenced Friday for the misappropriation of more than $200,000 in public funds in a case that could affect charter schools statewide.

ABC, the co-founder of XYZ, faces 4 years and 8 months in state prison.

His wife, DEF, who had a lesser role in managing school finances, must serve 45 days in County Jail. She also will serve five years' probation and perform 320 hours of community service.

Charter advocates followed the case closely. They said it could expose other operators to prosecution and could undermine the flexibility of California campuses that now enroll more than 410,000 students.

The California Charter Schools Assn. filed a brief with the court seeking a new trial, contending that "there was no crime here."

For charter critics, however, the result is a long-overdue rebuke of what they say is an anything-goes mentality that sometimes abuses the public trust and drains resources from students.

Charters are independently managed, publicly funded and exempt from some rules that apply to traditional schools.

"The operators of charter schools cannot use public funds for their own personal use or else they will be prosecuted," said Los Angeles County Deputy Dist. Atty. Dana Aratani.

Defense attorneys argued that charter schools -- California has about 1,000 -- should be treated as nonprofits, which have flexibility in spending money, provided they are furthering the mission of the organization. The couple insisted that much of their questioned spending was for such activities as "teacher appreciation," either group events or individual gestures, to build morale.

But there also were such issues as whether the couple structured their lease to siphon money from the school -- which ABC, 41, and DEF, 36, denied.

Improper jury instructions or other issues led to the dismissal of seven counts, which especially helped DEF, who faced one remaining charge. Some of the dismissed counts could be retried or prosecutors could seek to get them reinstated on appeal. 

ABC will appeal his sentence, said his attorney, Jeffrey H. Rutherford.

"We maintain that this prosecution is driven by a fundamental misunderstanding of charter schools and how they operate," Rutherford said.

The state asserts that the couple should pay more than $200,000 in restitution. A hearing on that issue is set for Nov. 15. 

ABC and DEF started XYZ, a charter school of 1,100 students that operates on three campuses, in 2004 and remained in charge until their arrests in 2010. The school had strong test scores, financial stability and a waiting list of applicants.

Witnesses at the sentencing hearing lauded the two for their talent and dedication as educators.