A defense attorney for the co-founders of Epic Charter Schools on Friday called their racketeering and embezzlement charge a politically motivated attack.
Ben Harris, 46, and David Chaney, 43, are not guilty, said Gary Wood, their attorney.
Oklahoma County District Attorney David Prater charged Harris, Chaney and their chief financial officer, Josh Brock, 40, on Thursday.
Brock’s attorney, Mack Martin, said his client denies any wrongdoing.
The Oklahoma State Bureau of Investigation arrested the Epic co-founders and Brock on Thursday morning. They were released the same day from the Oklahoma County jail on a $250,000 bond.
“This isn’t the first time that I have been involved in a case filed by Mr. Prater within a week of an election that is based upon an affidavit riddled with false statements,” Wood said in a statement Friday. “As in my prior case that was filed with political motivation, Ben and David will be exonerated.”
More coverage: New report accuses Epic Charter Schools of miscounting attendance, unapproved bonuses
Wood represented state schools Superintendent Joy Hofmeister in 2016 when Prater charged her with campaign violations and conspiracy.
The district attorney publicly confirmed an inquiry into Hofmeister for “potential criminal conduct” six days before the 2014 primary election. She defeated incumbent schools Superintendent Janet Barresi despite Prater’s announcement.
Hofmeister denied allegations that she colluded with a dark money group to win office.
Prater dropped the charges against her nine months after filing them.
“I knew I was innocent and that I had conducted myself appropriately, and I am happy that this day has come,” she said at a 2017 news conference.
2022 primary elections will take place Tuesday. Harris, Chaney and Brock aren’t running for public office, nor is Prater.
All three defendants face a felony charge of racketeering, four counts of embezzlement, using a computer for a fraudulent scheme, presenting false claims to the state and acquiring unlawful proceeds.
Harris and Chaney were charged with two additional counts of embezzlement and one count of obtaining money by false pretense.
Prater did not respond to Wood’s accusations of playing politics. Instead, he said “the defendants in this case enjoy a presumption of innocence.”
“They have a constitutional right to a preliminary hearing and a jury trial in their criminal case,” he said. “When those matters are scheduled by the Court, the State of Oklahoma will be prepared to present evidence to satisfy our burden of proof.”
Investigators allege Harris, Chaney and Brock illegally pocketed millions of taxpayer dollars, submitted false financial reports to the state, and spent money intended for Epic students on political donations and personal expenses.
Epic, a public virtual charter school system, cut ties with the co-founders and Brock in May 2021.
Chaney used state funds deposited in a bank account designated for student needs to pay for his personal credit card, according to a 50-page affidavit from the OSBI detailing the allegations behind the charge.
Chaney used that credit card to make political donations to Hofmeister, U.S. Rep. Stephanie Bice and state Rep. Preston Stinson, the affidavit states.
Bice returned two $2,800 donations from Chaney in August and October 2020, federal campaign finance records show.
Hofmeister received a $5,400 contribution from him in 2018, the affidavit states.
She said the co-founders were “clearly mistaken” if they thought the donation would ensure favored treatment, noting the $20 million in penalties the Oklahoma State Department of Education slapped on Epic over the past two years for mismanaging state funds.
“If true, it’s outrageous they would use the Learning Fund, meant for children, as their own personal trough for political contributions,” Hofmeister said.
Stinson did not return requests for comment.
Chaney, Harris and Brock have made dozens of donations to candidates, lobbying firms and political action committees, court documents state.
Sixty-five sitting lawmakers — almost half the state Legislature — received donations from Chaney, Harris and Brock from 2014 to 2020, according to a list of contributions included in the affidavit.
Some of those contributions came from the credit card Chaney financed with state education dollars, the affidavit states.
Chaney gave $100,000 to the Oklahoma Council of Public Affairs, a conservative think tank, from December 2019 to April 2020, using the credit card partially paid with Learning Fund dollars, the OSBI said.
The think tank became a vocal critic of the Oklahoma State Auditor and Inspector’s Office, which released a scathing audit of Epic on Oct. 1, 2020, after a year of investigation.
Harris and Chaney donated $744,500 to Prosperity Alliance Inc. from January 2020 to March 2021, the OSBI found. The dark money group is now supporting mailers favoring state Auditor and Inspector Cindy Byrd’s Republican primary opponent, Steve McQuillen.
“I believe that my opponent is a strawman in this race,” Byrd said. “I believe that most of the dark money being used against me in this race is from the founders of Epic Schools in retaliation for my office’s audit that exposed their scheme of taking millions of dollars from our students’ education funds.”
Former state Auditor and Inspector Gary Jones said he filed a complaint Friday with the Ethics Commission about the dark-money attacks against Byrd.
Jones, a former chairman of the Oklahoma Republican Party, said he named Harris, Chaney, political consultant Fount Holland and others in his complaint. He called for an immediate investigation.
“This isn’t going away,” he said.
Byrd was a top deputy for Jones while he was auditor.
Investigators allege Harris and Chaney used their money and political resources to influence the 2020 election of former state Sen. Ron Sharp.
Sharp has been an outspoken critic of Epic, and the school system unsuccessfully sued him for libel.
Harris and Chaney gave thousands to political action committees that produced negative campaign advertisements and mailers against Sharp, the OSBI said.
Sharp lost reelection in 2020 but won $500,000 in a countersuit against Epic’s libel case.
The co-founders’ company paid $22,000 to the State Chamber of Oklahoma six days after the chamber filed a court brief opposing the state auditor’s attempts to obtain Learning Fund records, the OSBI reported.
Three months later, the company wrote another check to the state chamber for $33,252, investigators said.
A lobbying firm owned by former Epic school board member Robert Stem received $520,000 over seven years from Harris and Chaney, court documents state. Stem was the board member who signed the contract to hire the co-founders’ company to manage Epic.
“Stem did not recall the details leading to (the company’s) selection to manage Epic,” an OSBI agent wrote. “The Board did not take requests for proposals from other management companies and the Board may have made a mistake by not doing so.”
Contributing: Staff writer Nolan Clay
Reporter Nuria Martinez-Keel covers K-12 and higher education throughout the state of Oklahoma. Have a story idea for Nuria? She can be reached at nmartinez-keel@oklahoman.com or on Twitter at @NuriaMKeel. Support Nuria’s work and that of other Oklahoman journalists by purchasing a digital subscription today at subscribe.oklahoman.com.
