Former leader of Oakland, Calif., charters is charged with money laundering

Ben Chavis was leader of schools collectively known as the American Indian Model Schools.

Ben Chavis, the former director of three Oakland, Calif., charter schools, has been charged with mail fraud and money laundering in connection with the schools’ applications for federal grant funds.

The East Bay Times reports that Chavis is accused of requesting more than $2.5 million of federally funded grants in violation of conflict-of-interest rules.

This is not the first time Chavis has been targeted for financial impropriety. In 2012, an investigation by California's Fiscal Crisis and Management Assistance Team found that from 2007 to 2011, Chavis had directed $3.8 million from the schools, collectively known as the American Indian Model Schools, to companies he owned for contracts not approved by the school board. He stepped down from the school in 2013.

The federal indictment announced Thursday states that Chavis, 59, and others devised a scheme from 2006 through 2012 to defraud the California School Finance Authority by requesting federally funded competitive grants for three charter schools in violation of conflict-of-interest regulations.

From 2000 to 2012, Chavis served off and on as the director and in various additional capacities for three Oakland charter schools — the American Indian Public Charter School, the American Indian Public High School II and the American Indian Public High School — as well as the schools’ umbrella organization, the American Indian Model Schools.

Chavis is accused of applying for grants to pay the costs of leasing facilities that he owned or controlled through his companies — American Delivery Systems and Lumbee Properties LLC. He allegedly concealed his interest in the facilities.

The 2012 state investigation looked into allegations of operational fraud and other unscrupulous activity by Chavi and his wife, who provided financial services to the school. It found numerous examples of financial conflicts of interest and fraudulent expenditures, including a $100,000 salary he took during at least one year of his retirement.

Overruling the Oakland school board’s attempt to revoke the charter in 2013, an Alameda County judge decided that the high-performing Oakland charter school could stay open because the district failed to consider academic performance as the most important factor in revoking the charter as required by state education law.

At the time, American Indian Model’s middle schools had at the time the best test scores in Oakland and among the highest in the state; its high school also had near-perfect scores.

The schools have since distanced themselves from Chavis by bringing in new leadership and purchasing one of the school buildings from him.

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