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Tangled web of Ohio charter school's purported international business, political self-dealing raises concerns with local lawmaker

October 12, 2016
Democrat Newsroom

State Rep. Michele Lepore-Hagan (D-Youngstown) today raised concerns over new allegations that Ohio charter schools possibly linked to an international Islamic religious movement have misused millions in taxpayer dollars through what’s being called a “closed-loop” leaseback scheme.

“Reports that Ohio charter schools are using millions in taxpayer funds for anything other than educating our children are deeply troubling and unfortunately speak to the continuing lack of adequate oversight in our state,” said Lepore-Hagan.

Chicago-based management firm “Concept Schools,” allegedly linked to exiled Muslim cleric Fethullah Gulen, operates 17 charter schools across Ohio, including the Horizon Science Academy in Youngstown. In a news conference Tuesday, a lawyer for the Republic of Turkey said Horizon Science Academy and other affiliated schools are essentially using an internal sale-leaseback scheme to siphon off U.S. tax dollars for groups opposed to Turkey’s government.

“This tangled web of business operations that puts profits over our children is just the latest in a long line of charter-related schemes that to a parent or educator would appear fraudulent but that continue to thrive in Ohio,” added Lepore-Hagan. “There needs to be a full investigation followed by real work at the Statehouse to rein in the “wild west” behavior of the charter industry.”

The charter schools’ profit making scheme has been used by Ohio charter operators before to essentially profit off of taxpayer dollars through a complicated web of subsidiary companies that charge their own affiliated charter schools above-market rent. The end result is millions in taxpayer dollars diverted from the classroom in order for charter schools to line the pockets of their own subsidiaries through exorbitant rent payments.