Feds charge Philly charter school mogul in massive fraud

Dorothy June Brown founded 3 city charters.
Dorothy June Brown founded 3 city charters.
Posted: July 25, 2012

A charter school mogul was charged today in a multimillion-dollar fraud case by the U.S. Attorney's Office.

Dorothy June Hairston Brown, who received accolades for students' test scores and gained notoriety for collecting large salaries and suing parents who questioned her actions, was indicted on multiple counts of wire fraud, obstruction of justice, and witness tampering.

Brown, 75, and four executives from her charter schools, were charged with defrauding three charter schools of more than $6.5 million in taxpayer funds.

U.S. Attorney Zane David Memeger announced that a federal grand jury had returned a 62-count indictment against Brown and four of her trusted employees.

"This indictment in this case alleges that June Brown and her four co-conspirators used the charter school system to engage in rampant fraud and obstruction," Memeger said during an afternoon news conference. "My office will continue to vigorously investigate and pursue those charter school operators who defraud the taxpayers and deprive our children of funds for their education."

He was joined at the announcement by FBI Special l Agent in Charge George C. Venizelos and Steven Anderson, the special agent in charge of the U.S. Department of Education's Office of Inspector General for the Mid-Atlantic region. Agents from both federal agencies were involved in the years-long investigation with Assistant U.S. Attorney Anthony Kyriakakis that led to the indictments.

"The bottom line is running a charter school does not give you a license to steal," Venizelos said.

Gregory P. Miller, one of Brown's attorneys, said in a statement late this afternoon that Brown "is a nationally recognized educator with a long and outstanding history or service to Philadelphia's school children."

Brown, Miller said, "denies all charges in the indictment and intends to vigorously defend herself against these unfounded charges."

A former Philadelphia school district principal, Brown founded three small charter schools in Philadelphia: the Laboratory which has campuses in Northern Liberties, Overbrook and Wynnefield; Ad Prima in Overbrook; and Planet Abacus in Tacony.

In addition, in 2005 she helped create the Agora Cyber Charter School, which provides online instruction to students from across the state in their homes.

Brown served as the chief executive officer simultaneously at Laboratory and Ad Prima and as a consultant to Planet Abacus until October of 2008, according to the nonprofit tax forms the schools filed.

She stepped down from the posts after the state law was changed that July of that year to bar charter administrators from collecting multiple salaries from schools or from companies that provide services to charters schools.

Brown was paid $150,000 for working 30 hours per week at Laboratory until that October and $115,904 for a 30-hour week at Ad Prima. In addition, she was a paid consultant to Planet Abacus and Agora, which at that time was headquartered in Devon.

Despite relinquishing the administrative titles, Brown retained control of day-to-day operations of Ad Prima, Laboratory and Planet Abacus, according to sources with knowledge of the schools.

Also charged with the crimes are longtime administrators at Brown's charters: Joan Woods Chalker, 74, Springfield, Delaware County; Michael A. Slade, Jr., 31, Philadelphia, Brown's grand-nephew; Courteney L. Knight, 64, King of Prussia; and Anthony Smoot, 49, New Castle, Del., who had been a business manager.

Today's announcement comes four years after federal authorities began examining Brown's operations in connection with a probe of another charter leader: Brien Gardiner, the founder and a former top administrator of Philadelphia Academy Charter School in the Northeast.

Brown and Gardiner cofounded Agora and were partners in an educational management firm, Cynwyd Group L.L.C..

In April 2008, The Inquirer reported allegations of fiscal mismanagement and nepotism at Philadelphia Academy and that the school district's inspector general had begun an investigation.

Gardiner committed suicide the following spring, shortly before federal criminal charges were announced. Philadelphia Academy's former CEO and former board president were sentenced to federal prison after pleading guilty to fraud charges.

In January 2009, Brown sued several Agora parents who had asked questions about the school's finances and its relationship with Cynwyd Group, which owned the charter's headquarters in Devon and was paid a management fee. Brown alleged that the parents and the Agora Parent Organization had defamed her and Cynwyd Group.

According to that civil suit, the parents made statements "that give the clear but false impression that Dr. Brown is corrupt, incompetent and possibly criminal."

Several months after filing that suit, Brown was forced to sever all ties with Agora to settle several civil suits.

Now based in Wayne, Agora continues to operate under new leadership and a new board.

The slander suit against the parents is pending in Montgomery County.


Contact Martha Woodall at 215-854-2789 or at martha.woodall@phillynews.com.

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