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District Sues Management Company and Owner to Protect Public Charter School Funds

Monday, June 2, 2014

District Sues Management Company and Owner to Protect Public Charter School Funds

CONTACT:  
Ted Gest
Public Information Officer
202-727-6283
ted.gest@dc.gov

WASHINGTON, D.C. – The Office of the D.C. Attorney General (OAG) filed suit today on behalf of the District for the benefit of a D.C. public charter school. The complaint was filed against Community Action Partners and Charter School Management LLC (CAPCSM), and its CEO, Kent Amos, alleging that they caused the school to divert funds from its nonprofit purposes, D.C. Attorney General Irvin B. Nathan announced. OAG alleges that the diverted funds were used to enrich the company and Amos, to the detriment of the school.

The school is operated as the Dorothy I. Height Community Academy Public Charter Schools, based at 1351 Nicholson St., N.W.  

The case was filed in D.C. Superior Court under the District’s Nonprofit Corporation Act, which authorizes the Attorney General to seek court relief against those who cause a nonprofit corporation to act contrary to its nonprofit purposes.    

Amos is the founder of the public charter school, Community Academy Public Charter School, Inc., and served as its CEO until 2004, when he founded CAPSCM and became its majority owner. The lawsuit alleges that Amos has operated the school as if he owned it, causing the school to distribute its operating profits to Amos’s company.

OAG alleges that CAPSCM and Amos caused the school to pay CAPSCM more than $13 million in so-called management fees since 2004, including approximately $4.4 million over the 2011-2012 and 2012-2013 school years, when CAPSCM’s purported management work was largely performed by employees of the school. The lawsuit charges that Amos and the management company “are on track to receive about another $2 million” for the current school year for work that could be performed by school employees.  

OAG seeks to enjoin future payments from the school to CAPSCM or Amos, obtain a constructive trust over school funds improperly distributed to CAPSCM or Amos, and rescind the current management contract, among other equitable remedies.  

The District’s Public Charter School Board said it is cooperating with the Office of the Attorney General in its investigation as the case proceeds.
 
“Under the District’s Nonprofit Corporation Act, a public charter school may not distribute millions of dollars of operating revenues – in this case derived from District tax dollars – to benefit private persons,” Attorney General Nathan said. “We will fight manipulation and abuse of the Charter school system that cheats the District and federal taxpayers.”