Virtual charter school case in court this week

A Hamilton County court hearing this week may determine whether Indiana taxpayers have a chance to recover $154 million from two virtual charter schools and their leaders and business partners.

The hearing, set for 1:30 p.m. Wednesday before Hamilton Superior Court Judge Michael Casati, concerns motions to dismiss a lawsuit to recover charter school funds that were allegedly obtained by fraud or improperly spent.

Attorney General Todd Rokita filed the suit in July 2021 on behalf of the state. Defendants include the schools — Indiana Virtual School and Indiana Virtual Pathways Academy — and several of their officers and employees. Also named are businesses that were affiliated with the schools.

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Audit: Virtual school paid millions to founder’s company

A 2015-16 audit report for Indiana Virtual School was released last week, and it shows the school continued to pay millions of dollars to for-profit companies run by the school’s founder and his son.

Chalkbeat Indiana laid out the details of this arrangements in an investigation published in October 2017. The online charter school, while organized as a nonprofit entity, paid management, administrative and technology fees to AlphaCom Inc., a business run by school founder Thomas Stoughton.

It also paid A Simple Reminder, a business run by Stoughton’s son, for IT and marketing services. Thomas Stoughton, the AlphaCom head, also served as chairman of the Indiana Virtual School board.

In 2015-16, according to the audit report, the school was charged:

  • $6,156,179 by AlphaCom.
  • $1,255,000 by A Simple Reminder.

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