Connect with us

Hi, what are you looking for?

Corruption

U.S. attorney: Defendants in virtual school scheme betrayed Alabama students

The brazen scheme to divert money to Athens and Limestone districts essentially stole from struggling schools in the Black Belt.

(STOCK PHOTO)

In September 2019, a few weeks after the start of the new school year, agents from the FBI and the U.S. Department of Education dropped in at the Limestone County Schools central office for an unannounced interview with then-superintendent Tom Sisk. 

Over the course of the next hour or so, the agents grilled Sisk and other school officials about the enrollment numbers in the district’s new virtual school, and about an odd contract with a start-up consulting company that would operate that school. A recording of that interview was provided anonymously to APR, which first reported on the joint federal investigation and the Limestone interview last August. 

On Tuesday, the FBI, DOE and U.S. attorney for the Middle District of Alabama announced that six individuals, including Sisk and Athens Superintendent Trey Holladay, had been indicted on hundreds of charges for their roles in a virtual school scheme that diverted millions from struggling Black Belt schools to Limestone, Athens and the pockets of several individuals. 

“That recording really laid everything out, didn’t it?” said former Limestone human resources director Mark Isley, who was present at the meeting and who has heard the recording. “What they were asking about in that interview was exactly what the indictments were about. That was the original scheme they had working.” 

That scheme worked like this: Sisk entered into an agreement with Educational Opportunities, a consulting company founded by Greg Corkren, to manage Limestone’s virtual school program. Educational Opportunities would then recruit students to enroll in the virtual school and would receive a management fee for operating the school — a percentage fee that was based on the number of students enrolled. 

Educational Opportunities began recruiting private school students to “dual enroll” in Limestone, and the company promised laptops and other incentives to private school students who did enroll. The laptops, it turned out, were supplied by Limestone County Schools — more than 100 of them, which were never recovered — and federal investigators clearly believed during the interview that Sisk knew far more about the incentives, the improper enrollment of a part-time student and about other taxpayer money finding its way into the pockets of school officials. 

At a press conference Tuesday, U.S. Attorney Louis Franklin said Sisk and Holladay knew much more, and Holladay was apparently operating a similar scheme in Athens — with his wife. Holladay’s wife Deborah, who was also indicted, started her own consulting company and received a contract through Athens Schools to perform the same functions Corkren was performing for Limestone. 

Advertisement. Scroll to continue reading.

David Tutt, a former Marengo Academy football coach, was also indicted for using his consulting company to work the same scheme with the Holladays. 

In total, the indictment lists 10 private schools that were contacted during the investigation and possibly participated in the scheme. But much of the student information used for the scheme appears to have simply been stolen by the consulting companies. 

By the end, Franklin said, the defendants were fabricating almost everything, including school records, student home addresses, transcripts and report cards — all in an effort to bump up enrollment numbers and keep the $6,000-per-pupil funding money rolling in. 

“Many of these students have never heard of the virtual schools they were supposedly enrolled in,” Franklin said. “Many of them received no education at all from the virtual schools. The defendants, in this case, prioritized their own profits over the education needs of our students. In doing so, they stole children and parents’ identities and bribed administrators of private schools. I hope that this indictment serves as a warning for others who might try to line their pockets with public funds.” 

All six of the defendants are charged with conspiring to commit mail and wire fraud. Trey Holladay, Deborah Holladay and Rick Carter, who operated Athens’ virtual school, also face numerous wire fraud charges. And Trey Holladay, Carter and Corkren are charged with aggravated identity theft. 

And the investigation is not over. At Tuesday’s press conference in Montgomery, federal officials declined repeatedly to say that the indictments end the virtual school investigation in the state, and a source familiar with the process told APR that interviews are still being conducted and other indictments related to virtual school fraud could follow in the future. 

Isley has leveled other allegations, including that the Limestone system wasn’t adhering to disability guidelines within its virtual program and that the system was falsifying the number of teachers employed at the virtual school.

Advertisement. Scroll to continue reading.
Josh Moon
Written By

Josh Moon is an investigative reporter and featured columnist at the Alabama Political Reporter with years of political reporting experience in Alabama. You can email him at [email protected] or follow him on Twitter.

DIG DEEPER

Education

U.S. Attorney Louis Franklin laid out the scheme while announcing six indictments Tuesday.

Corruption

The indictments include two former Alabama superintendents and a former high school football coach.

Education

A man who was trying to do the right things, the honorable things, has been treated as the villain and punished as if he...

Education

If used properly, the virtual schools model could have been quite a money-maker for cash-strapped districts where parents were opting for private schools or...