Epic Charter Schools finance official testifies about payment concerns

During the second day of the preliminary hearing in the massive racketeering and embezzlement case against Epic Charter Schools’ co-founders David Chaney, 44, and Ben Harris, 48, and longtime CFO Josh Brock, 42, Epic’s deputy superintendent for finance said the school was left holding the bag for $14 million with its students and parents after Epic’s school board cut all ties with the trio in the spring of 2021.

“There has been no money returned to the school,” Jeanise Wynn told prosecutors about Epic’s Student Learning Fund, which had been taken into the private bank account of Harris and Chaney’s school management company, Epic Youth Services.

“The information I received related to carryover liability — $14 million in liability parents had on accounts — that was the carryover liability of June 2021. The students and parents were allowed to spend their money or carry it over to the next year when it was under EYS’ management. If they had a $4,000 balance credit in their Learning Fund account, we honored that $4,000 even though we did not receive that $4,000 back from EYS.”

Two other witnesses on Tuesday testified to the use of non-school credit cards to pay for Epic Charter Schools students’ learning needs, as well as to allowed uses of state funding allocations to public schools for textbooks.

Chaney, Harris and Brock were arrested and charged in June 2022 in Oklahoma County District Court under the Oklahoma Racketeer-Influenced and Corrupt Organizations, or RICO, Act.

The criminal case, now being prosecuted by the Oklahoma Attorney General’s Office, alleges 15 counts, including embezzlement, money laundering, computer crimes and conspiracy to defraud the state.

Wynn’s testimony on Tuesday afternoon offered new insights into what precipitated Epic’s governing board’s severing all ties with Chaney and Harris’ Epic Youth Services in May 2021.

Wynn recalled being personally recruited to Epic by Harris, leaving Edmond Public Schools, where she worked the previous eight years. She described the move as “a leap of faith” because Epic was not well thought of for having drawn away so many students — and the financial resources that followed them — from “brick-and-mortar” traditional public schools during the COVID-19 pandemic.

She arrived at Epic in February 2021 but said that by late March of that year, she began to be concerned about the amount of taxpayer dollars being paid to Epic Youth Services, the private company of Harris and Chaney with which the school’s governing board contracted to manage the school.

Wynn said she immediately discussed with Epic Superintendent Bart Banfield her “personal belief” that more public monies were being paid to EYS for Epic Students Learning Fund than should have been allocated — to the tune of $8 million — and the fact that she was “concerned” that EYS was taking 10% of every dollar of taxpayer revenue coming to the school for educating public school students as a “management fee.”

She said she was surprised to learn that all the employees managing Student Learning Fund requests for Epic students in Oklahoma and California were Oklahoma taxpayer-funded school employees, when EYS had an agreement to manage the Oklahoma Epic school’s Student Learning Fund.

“I expected them to be on the payroll for EYS,” Wynn said.

As for EYS taking a 10% cut of every dollar of taxpayer revenues coming into the school through a management fee, “10% felt very high to me. That was my opinion, coming in new, not knowing how things were being handled,” Wynn said. “That year, it was $40 million or so — $45 million or something like that.”

Additionally, she said she was surprised to learn that EYS, using an “every student count” method, was invoicing the charter school for the Learning Fund for 8,000 more students than the average daily membership count of students used to calculate state aid for public schools, including Epic, but not accounting for where the money was being spent or how much was carried over in the account from one year to the next.

That Learning Fund was designed to set aside $1,000 in public funds to cover the cost of every student’s online curriculum, plus a laptop and mobile internet hotspot for those who needed them, and then to allow parents and students a say in spending the balance on educational materials or extracurricular activities.

“The Learning Fund was not part of the compensation section of the agreement (between the school board and Epic Youth Services), and it was a set-aside for students, so I believed it was only being used for the benefit of students,” Wynn said. “I had access to the student order information at that time, but I didn’t have access to how the bills were paid or how much money was in the account at that time. … Josh Brock was creating invoices on behalf of EYS, and he was involved in the payment process. He was approving them and then receiving the payment (for EYS).”

Chaney’s defense attorney has contended that much of the taxpayer monies Chaney, Harris and Brock are accused of misappropriating had actually become “private funds” once they were received into the bank account of Epic Youth Services.

Over the objections of defense attorneys for Harris and Chaney, Special Judge Jason Glidewell allowed Wynn to answer a prosecutor’s questions about something she heard Harris share with Epic’s school board during a closed-door executive session during March or April of 2021.

“He informed those present that money from the Learning Fund had been transferred to Epic-California,” she said, adding that she was concerned about that because “that’s not for the benefit of Epic Oklahoma students.”

She later said: “It was presented as a heads-up about a report that EYS was going to be giving to the school. There was discussion about some of the factors involved. There was an explanation, and there was discussion about that money being paid back.”

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