McKay scholarship program sparks a cottage industry of fraud and chaos

From June 2006 through November 2010, the woefully cash-strapped Florida Department of Education (DOE) forked over $2.057 million to Julius Brown, former middle school basketball coach and cofounder of a string of obscure sports apparel businesses.

The money was in the form of tuition vouchers for kids with physical and learning disabilities to attend the South Florida Preparatory Christian Academy, the Oakland Park K-12 private school of which Brown — a looming and lean former basketball pro with a slug-like mustache — was founder, president, principal, athletic director, and boys' basketball coach.

As is customary with schools that receive the vouchers, provided by the John M. McKay Scholarships for Students With Disabilities Program, the DOE didn't inquire about Brown's curriculum or visit South Florida Prep's campus to make sure it was safe for schoolchildren. In Florida, private schools essentially go unregulated, even if they're funded by taxpayer cash. South Florida Prep also received at least $236,000 from a state-run tax-credit scholarship for low-income kids.

While the state played the role of the blind sugar daddy, here is what went on at South Florida Prep, according to parents, students, teachers, and public records: Two hundred students were crammed into ever-changing school locations, including a dingy strip-mall space above a liquor store and down the hall from an Asian massage parlor. Eventually, fire marshals and sheriffs condemned the "campus" as unfit for habitation, pushing the student body into transience in church foyers and public parks.

The teachers were mostly in their early 20s. An afternoon for the high school students might consist of watching a VHS tape of a 1976 Laurence Fishburne blaxploitation flick — Cornbread, Earl and Me — and then summarizing the plot. In one class session, a middle school teacher recommended putting "mother nature" — a woman's period — into spaghetti sauce to keep a husband under thumb. "We had no materials," says Nicolas Norris, who taught music despite the lack of a single instrument. "There were no teacher edition books. There was no curriculum."

In May 2009, two vanloads of South Florida Prep kids were on the way back from a field trip to Orlando when one of the vehicles flipped along Florida's Turnpike. A teacher and an 18-year-old senior were killed. Turns out another student, age 17 and possessing only a learner's permit, was behind the wheel and had fallen asleep. The families of the deceased and an insurance company are suing Brown for negligence.

Meanwhile, Brown openly used a form of corporal punishment that has been banned in Miami-Dade and Broward schools for three decades. Four former students and the music teacher Norris recall that the principal frequently paddled students for misbehaving. In a complaint filed with the DOE in April 2009, one parent rushed to the school to stop Brown from taking a paddle to her son's behind.

"He said that maybe if we niggas would beat our kids in the first place, he wouldn't have to," the mother wrote of Brown. "He then proceeded to tell me that he is not governed by Florida school laws."

He wasn't far off. The DOE couldn't remove South Florida Prep from the McKay program, says agency spokesperson Deborah Higgins, "based on the school's disciplinary policies and procedures."

It's like a perverse science experiment, using disabled school kids as lab rats and funded by nine figures in taxpayer cash: Dole out millions to anybody calling himself an educator. Don't regulate curriculum or even visit campuses to see where the money is going.

For optimal results, do this in Florida, America's fraud capital.

Now watch all the different ways the flimflam men scramble for the cash.

Once a niche scholarship fund, the McKay program has boomed exponentially in the 12 years since it was introduced under Gov. Jeb Bush, with $148.6 million handed out in the past 12 months, a 38 percent increase from just more than five years ago.

There are 1,013 schools — 65 percent of them religious — collecting McKay vouchers from 22,198 children at an average of $7,144 per year.

The lion's share of that pot ends up in South Florida. Miami-Dade received $31.8 million, more than any other county in the state, and Broward was second with $18.3 million. Palm Beach ranked fifth, with its schools collecting $6.9 million.

But there's virtually no oversight. According to one former DOE investigator, who claimed his office was stymied by trickle-down gubernatorial politics, the agency failed to uncover "even a significant fraction" of the McKay crime that was occurring.

Administrators who have received funding include criminals convicted of cocaine dealing, kidnapping, witness tampering, and burglary.

Even in investigations where fraud, including forgery and stealing student information to bolster enrollment, is proven, arrests are rare. The thieves are usually allowed to simply repay the stolen loot in installments — or at least promise to — and continue to accept McKay payments.

There is no accreditation requirement for McKay schools. And without curriculum regulations, the DOE can't yank back its money if students are discovered to be spending their days filling out workbooks, watching B-movies, or frolicking in the park. In one "business management" class, students shook cans for coins on street corners.

And public schools now apparently help with the recruiting. Failing kids, who would sabotage all-important standardized testing scores, are herded en masse to dubious McKay schools.

The McKay fund is not the only cash cow that unregulated schools can dip into. There's also the Florida Tax Credit Scholarship, which gives tax breaks to corporations in return for private school scholarships. With Gov. Rick Scott pushing privatization of education in all forms, legislation that passed in May is set to skyrocket both programs.

The tax-credit fund saw its cap increased by $30 million to $175 million, while the McKay program could nearly quadruple. Thanks to the amended law, a kid with a peanut allergy could now find himself eligible for a scholarship created for students with learning and physical disabilities.

New Times shared findings from this investigation with state Sen. Stephen R. Wise (R-Jacksonville), one of the co-introducers of the McKay program in 1999. "It's appalling," Wise says. "I'm amazed that there's not more scrutiny about where the money is going."

"After I get done with you," he tells a reporter, "I need to talk to my staff director. We need to have some hearings and do whatever we can to make some changes."

According to Republican lore, it started with a senator's child and a nun.

In the mid-'90s, state Sen. John M. McKay (R-Bradenton) struggled to find a proper school for his daughter, who had a learning disability.

"I called every public school in my district," McKay, who has since retired from office, tells New Times. He ended up sending her to Dreams Are Free, an idyllic, specialized school in Sarasota run by Sister Gilchrist Cottrill.

McKay's epiphany: Create tuition vouchers so that all Florida children with special needs could go to schools like Sister Gilchrist's. As senate president in 1999, he tacked his namesake program to Gov. Jeb Bush's fledgling A+ Plan for Education, a voucher program paying private school tuition for students from poorly performing public school districts.

Two years later, Republican lawmakers passed the Tax Credit Scholarship program for low-income kids, which offers a smaller tuition cap — currently $4,106 — but is available for more students.

The add-ons were politically shrewd. Bush's program was hugely divisive and, as it turns out, doomed. In 2006, the state Supreme Court ruled that the A+ Plan was unconstitutional and a drain on public school coffers. But the McKay and Tax Credit scholarships chugged onward.

To be eligible for a McKay voucher in the early days, a student would have had to qualify for an individual education program (IEP) — which encompasses conditions ranging from attention disorders and autism to physical disabilities — and be failing in public schools. The latter requirement was eventually scrapped by legislators. A cap limiting the number of McKay kids per district was also tossed.

Today, students with an IEP are required only to spend at least one year in a public school to qualify for the McKay program. But even in that, there is fraud. In June 2010, Deborah Swirsky-Nuñez, a special-education supervisor in Miami-Dade County Public Schools and wife of region superintendent George Nuñez, was arrested for playing a sort of three-card monte with the McKay system in order to have her two kids' private school tuition paid by the state.

According to investigators, Swirsky-Nuñez fabricated address records. She falsely enrolled the children at the public Dr. Michael M. Krop High even though they attended Plantation's American Heritage Private School. And she used her sway with test administrators to rig her kids' performance on the IEP exam, securing a combined $19,000 annually in McKay payments.

At least seven others, including her husband George, were implicated, but only Swirsky-Nuñez was charged with organized fraud. She has pleaded not guilty, and her trial will begin in October. Krop's principal, Matthew Welker, was suspended for 30 days for alleged complicity in the scheme.

The recent expansion of the McKay program should only make it easier to milk the system. The new law, which last month easily passed the Florida House and Senate and was signed by Governor Scott, makes students with "504 plans" — special accommodations for physical impairments — eligible as well.

That includes asthma and allergies to anything from peanuts to bee stings, says Ron Meyer, a lobbyist for the Florida Education Association, who argues that the expansion is "undermining the validity of the program."

An additional 52,000 students will be eligible, almost quadrupling the pool.

McKay waffled with indecision before throwing his support behind the expansion. He insists he "would never want this program to be a Trojan horse towards the destruction of the public school system." After reading a partial draft of this story, McKay hedged that "there are sins in every program" but added that the state is unwise to "abandon all oversight... Somebody better get off their ass and fix those problems."

The nun also has misgivings. Sister Gilchrist, of the prototypical McKay school, has seen her copycats. "There are a lot of people who are starting these little schools, and the teachers aren't qualified," she says. "There needs to be some oversight."

Department of Education investigator Seth Stoughton, who specialized in voucher fraud, had a strategy when he'd go on field trips from Tallahassee to other regions around the state. He'd print out a list of every McKay school in the area and drive his rental car past the addresses, just to make sure the schools were there.

He was on the lookout for outfits such as Jacksonville's Cyber Tech Academy, to which the state had paid $54,000 in tuition through 2004 despite the fact that the school didn't physically exist.

That's as proactive as any investigation ever got, says Stoughton, a former Tallahassee Police officer. From 2005 through 2008, he worked with three to four colleagues in the DOE's Office of Inspector General. "I never got the sense that we really got a good grasp on the scope of potential fraud," he says.

Registering a private school is as easy as filing minimal start-up paperwork. Becoming eligible to receive McKay payments isn't much tougher and relies mostly on the honor system: You must claim to have a location, promise to run background checks on staffers, and either have been in business for three years or have access to a surety loan or line of credit. "The restrictions on opening a school are so relaxed," Stoughton says, "that it's almost a right rather than a privilege."

The DOE has investigated 38 schools suspected of McKay fraud. In 25 cases, the allegations have been substantiated. Of those, five — Muskateer's Academy, Paladin Academy, Choice Preparatory School, Center of Life Academy, and Hope Academy — were in Miami-Dade.

The thieving schools across the state received, or in many cases are still receiving, McKay money totaling $49.3 million.

In the 27 investigative reports that were made available to New Times — the rest have been purged — the vast majority were sparked by a tip, usually from an associate with an ax to grind. A few of the more notable cases:

• At Homestead's Hope Academy, recipient of $2.8 million from McKay, a 2010 investigation revealed at least three staffers had criminal records. One of the employees had pleaded guilty in Georgia to intent to distribute cocaine. Another had served two years in the same state for the sale of marijuana. The school is the target of a lawsuit filed by a mother who claims her developmentally disabled daughter was repeatedly molested by a classmate on a school bus and that principal Cecil Persaud did nothing about it. Visited by New Times, Persaud — a gray-toned man with a patchy mustache — claimed the fraud "didn't ring a bell," refused to discuss the molestation lawsuit, and threatened to call police.

• The most common caper involves simple forgery: school administrators doctoring attendance records and signing parents' names to show that students are enrolled when they're actually not. Jacksonville's Success Academy — which received $4.8 million — was likely the largest such case. From 2001 through 2005, the school accepted $421,000 for 52 students who were enrolled in public schools.

• At Muskateer's Academy in Hialeah (Stoughton says of the name: "I think they just had no idea how to spell"), husband and wife school owners Jacqueline and Erick Cermeno were indicted for stealing several students' disability information to falsely enroll them and pocket thousands in tuition. Muskateer's received $794,000 from the state. The Cermenos were sentenced to ten years' probation and seem to have disappeared to Texas.

But some of the most egregious offenders have evaded even a slap on the wrist. In February 2008, Stoughton's office held countless hours of deposition and prepared a damning 795-page report in exposing a similar $78,000 fraud at Harvest Christian Academy in Tampa. The principal, Bishop Michael Wayne Lewis, was already serving five years in federal prison for a $3 million bank fraud case. Lewis scoffed that because "he was currently incarcerated for a scheme involving the theft of $3 million," according to a report, "he would not 'waste' his time with $78,000."

The State Attorney's Office (SAO) apparently agreed, deciding not to press charges. "This was a case I had worked on the entire time I was there," Stoughton says. "It was incredibly frustrating."

The apathy to McKay fraud was politically motivated, he believes. "This program was the governor's baby, and he had a lot of political capital invested in this," the former investigator says of Bush, who held office until January 2007. "My understanding was that he viewed our investigations as negative publicity about the program."

Counters Bush's spokesperson Jaryn Emhof: "Governor Bush has consistently supported greater accountability over the scholarship programs."

Of the case reports provided to New Times, only three resulted in arrests. The vast majority of offenders were ordered to simply repay the stolen money, although many of them have failed to make payments.

In October 2007, prosecutors did decide to press charges in a case involving two sisters. Betty Mitchell and Jeannette Nealy had swindled at least $200,000 in McKay money through Faith Christian Academy in Polk County.

Stoughton helped the SAO write a news release, detailing the fraud and the sisters' potential prison time — they would later be sentenced to a combined 17 years — to send to media outlets. There's no deterrent to like-minded schemers, Stoughton believes, like a nice, scary news story.

When Stoughton shipped a draft of the release up the flagpole at the Department of Education, he says, "The response I got was essentially: This is good news how?"

Stoughton eventually left the department to go to law school. The DOE never sent out that news release.

Sheldon "Klassy" Klasfeld, beaver-toothed and round-spectacled with slicked curly locks, sits in his junk-clogged sliver of an office in the front of Academic High School. The principal and founder of the Boca Raton academy — and perennial candidate for the Florida House — is in full stall-and-divert mode, waxing at length about his hippie days in Pittsburgh, clearly reluctant to give a tour of his school, located in a nondescript strip mall.

Eventually, he exhausts his tale of hitchhiking to Woodstock and opens a door into maze-like halls of yellow wood panels, scrawled in places with black graffiti.

In two classrooms, high school kids sit in oppressive silence, plowing through workbooks. The teachers are at their own desks, saying nothing. This is not an exam day: Academic High students get credits, and eventually diplomas, by filling out answers in textbooks every day from 8 a.m. to 1:30 p.m. Lunch is not served, though kids can buy chips and soda from vending machines wedged in a corner.

The state is aware of Klasfeld's special brand of academia. In 2003, the Palm Beach County school board shuttered Academic High — which was then a charter school — for mismanaging its budget and cramming multiple classes into one room. Klasfeld appealed in person to the Florida Cabinet, where he was unanimously denied by a panel including Governor Bush and then-Education Commissioner Charlie Crist.

Within a year, Academic High re-opened as a private school and has received $138,000 in McKay cash, drawing the same milk from a different DOE teat.

Ask Klasfeld, though, and he's simply providing options to students, most of them with learning disabilities, who would never pass Florida's standardized tests required for graduation in public schools. "I used to be a big advocate against the FCAT," he remarks while sitting at a picnic table outside after the hasty tour. "Then I realized it was just bringing more kids to us."

After some consternation, Klasfeld pulls a student out of class to speak with a reporter. Seventeen-year-old Alex is pock-marked and slow-speaking. Until 2009, he attended Coral Springs' Academy High School — which received $3.7 million in McKay funds — before administrators there were caught forging parents' signatures, among other ploys, to continue receiving money after the disabled students were no longer enrolled.

Alex says it's not entirely just book work at his new alma mater. "We do reports too," he says. "About presidents, about Osama, stuff like that."

Klasfeld sits across the picnic table from Alex and often interjects nervously. Alex says he wants to enlist in the Army after he gets his diploma. "Ten-hut!" the principal hollers nonsensically. "Sir, yes, sir!"

As the program director of a Fort Lauderdale tutoring and after-school nonprofit called HANDY — Helping Abused, Neglected, Disadvantaged Youth — dealing mostly with poor and African-American children, Kirk Brown is depressingly familiar with the scourge of two-bit McKay schools "preying" on South Florida's inner cities.

Twenty-eight percent of the scholarship fund's students are African-American, and 45 percent qualify for free or reduced-price lunches. Ghettos tend to attract the huckster portion of the McKay schools. In neighborhoods such as Liberty City and Sistrunk, it seems, you can't swing an FCAT without hitting a dubious educator setting up a fly-by-night school designed to lure kids who might otherwise struggle with standardized testing.

Any combination of the words preparatory, Christian, hope, academy, and perhaps Zion usually appear in the name. The administrators make their arrival to a neighborhood known by leafleting and billboarding housing projects. Or they show up at Sunday services and prowl for old ladies wearing church hats and toting children. "They look for kids who don't have traditional parents," Brown says. "Grandmothers, aunts, uncles — anybody who's not necessarily going to do their homework and may be swayed by the religious angle."

The inevitable morning comes when those students show up for class to find only an empty store for rent, or they attempt to transfer to another high school or matriculate to college and are informed their credits are worthless.

"They have that look of somebody whose house just got robbed," Brown says of the children he's watched go through the experience. "These schools are run by the worst kind of parasites. All these kids have is their education, and that's what they're trying to steal."

But sometimes the parasites don't have to do that much work, because public school administrators do it for them.

Beginning a few school years ago, Carol City Senior High social studies teacher Paul Moore was mystified by a new, perennial exodus of his "problem" seniors — students who might fare badly on FCATs. They were kids he usually liked to have one last-ditch shot at improving their studies.

Eventually, he figured out where many of them had ended up: Parkway Academy in Miramar, a charter school and target in 2009 of the Florida High School Athletic Association's largest fine — $260,000; later reduced to $118,000 — for dozens of football recruiting violations. Other of Moore's missing seniors had scattered to private schools, most of them McKay-funded. "It's an absolute policy in this state now to move at-risk kids to charter or private schools," Moore says.

A Plantation High reading teacher, who asked that her name not be used, can relate. She has noticed her "problem" seniors disappearing like never before. Sometimes she runs into them on the street and finds out they're at Preparatory Zion Academy or someplace similar. "These kids are graduating, but they're illiterate," the teacher says. "If you ask me, it's criminal."

The principals of neither Carol City High or Plantation High responded to New Times' inquiries. Public school brass are loathe to publicly admit to pushing struggling kids toward private schools.

The illicit practice even has a name: "FCAT cleansing."

Chris Christe could be the poster child for McKay scholarships. Sweet and glassy-eyed, he was raised by his grandmother in the shadow of Joe Robbie Stadium in Miami Gardens. Mom had died when he was 10 years old while she was giving birth to his brother. Dad made an awkward visit every three years.

Chris had trouble paying attention at Norwood Elementary and lagged behind classmates. In fifth grade, he took an IQ test. He got a 95. "Not retarded retarded," his blunt-spoken grandmother Gloria Joachim says, but low enough that the assistant principal recommended a more specialized school day: Have you heard of the McKay program?

So Chris ended up at the South Florida Academy of Learning, located in a storefront at the California Club Mall. Two years later, it went bellyup. Next there was Opa-locka's Monsignor Edward Pace, a large private high school that accepts McKay scholarships. The classes were too "fast for him," Gloria says, and she'd find Chris cowering in her bathroom when it was time to go to school. Last year, he finally received a diploma from the unaccredited West Hollywood Private School, which is run by a husband and wife in their converted home.

While transferring her grandson's credits, Gloria was bewildered to find that, according to the state, he was already enrolled at another school she had never heard of: Muskateer's Academy in Hialeah. As it turns out, Jacqueline and Erick Cermeno, the couple who ran Muskateer's, had stolen Chris's McKay information from the South Florida Academy of Learning, where Jacqueline had once worked.

"I'm unimpressed," 69-year-old Gloria says with a cynical chuckle when asked her opinion of the McKay program. She estimates taxpayers invested roughly $30,000 in the last six years of Chris's education. "I wish that money could have gone to establishing an area in his own public school for kids with special needs. Then there would have been some accountability."

Though it sounds exotic, what Gloria is describing is the traditional public special-ed model. "I didn't have the illusion that he was college-bound," she says, "but I wish he could have more skills that would help him with a job."

Now 22, after getting his high school diploma, Chris spends his days pacing Grandma's living room. He talks about becoming a songwriter, but when art colleges return his phone calls, he tells them Chris isn't home and hangs up.

"No job, no school, no nothing," Gloria laments. "If you can think of what to do with him now, let me know."

Christopher Vaughn decided it was time to leave South Florida Preparatory Christian Academy — the Oakland Park strip-mall school with the ass-thwacking principal — in his junior year, when a classmate tried to stab his brother with a pen.

It was 2010, and Christopher was 18. He was a sturdily built kid with a hard-fought, scraggly beard and loads of ambition despite having sprouted from tragedy: Mom dead of AIDS, Dad always working, six siblings, raised mostly by a grandmother who was getting eaten by Alzheimer's.

He wanted a college degree. He wanted to start an organization to help kids with rough home lives just like his. Before going to South Florida Prep, he had been a good student at Lauderhill Middle School.

But when Christopher tried to transfer his credits — all As and Bs — from the disastrous private high, they were rejected by the charter Smart School. Then the alternative public school Whiddon-Rogers Education Center turned down his transcript as well. Having made no mistake besides going to the high school his grandmother heard about at church, Christopher faced the prospect of being a freshman again.

"I had to start from scratch," he says. "Everything just went down the drain. I didn't feel like being in school no more."

He hasn't taken the excuse to give up. He's now about five credits from graduating from Whiddon-Rogers.

In October the year that Christopher left South Florida Prep, fire marshals shut down that school. The student body wandered between local parks and churches for a month, before the DOE finally suspended its McKay payments, about four and a half years too late.

Principal Julius Brown was sued by the strip-mall owner for falling behind $55,650 in rent, and he faced three other lawsuits related to the tragic van accident on the trip from Orlando. He does, however, know one way to make some money in a hurry.

In March 2011, Brown and partners incorporated Sunrise College Preparatory School in Orlando. According to its website, classes in grades kindergarten through 12 begin August 29.

Sunrise College Prep is not registered with the state, but Brown clearly has a plan: The school website advertises that it accepts McKay scholarships.

After reaching Brown by phone at his new school, New Times could get in only one question: Planning on paddling kids in your new digs?

"I got nothing to say to you!" he bellowed before hanging up. "South Florida Prep was a long time ago. I've moved on!"

Rich Abdill contributed to this report.

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