The new secondary dean of students in Dolores School District Re-4A is facing embezzlement charges by the San Diego District Attorney’s Office, but school administrators hope he will be exonerated soon and have expressed full support of his hiring.
Justin Schmitt, 36, is one of 11 defendants in a case involving a $50 million charter school fraud, although his attorney Eric Beste emphasized that Schmitt was a salaried employee and not an owner of the company, and that no one has yet been convicted in this case
He began working for Re-4A on Aug. 12, replacing outgoing dean and athletic director John Marchino, who now works for the Mancos School District Re-6. There were nine candidates for the position, five of whom were interviewed, according to Doreen Jones, finance director with the district.
Superintendent Lis Richard said Schmitt went through a thorough vetting process that included legal consultation, background checks, an interview committee and board approval.
She told parents in a letter dated Sept. 26 that he is “an extraordinary administrator.”
“I promise you that we are aware of anything you may have heard and we stand by him in full support,” Richard wrote in the letter. In an email Wednesday, she reiterated those points, adding that he is “the right person for our secondary dean of students position. His passion, dedication and wisdom are exemplary.”
She encouraged parents who had questions about Schmitt to visit her.
Efforts to reach Dolores School Board President Kay Phelps have not been returned.
Schmitt declined to comment for this article, citing his attorneys’ advisement. According to the indictment, he faces about a dozen criminal charges, including conspiracy to commit a crime and misappropriation of public money. He could face a maximum sentence of 11 years in custody.
The case in question involves two alleged ringleaders – Sean McManus and Jason Schrock – who opened 19 online charter schools and allegedly used them to embezzle $50 million in state funds, according to a statement released by the San Diego District Attorney’s Office.
The 235-page indictment was handed down by a grand jury May 17 after a yearlong investigation by the district attorney’s office. Overall, it lists several criminal counts, including conspiracy, misappropriation of public funds, paying for student information and conflict of interest.
Much of the alleged fraud involved falsifying enrollment counts in order to secure additional state funding, according to the statement released by the San Diego District Attorney’s Office. The indictment charges the defendants with seeking out small school districts and proposing they authorize online charter schools, in order for A3 to earn more public funds in the form of oversight fees.
Additionally, the indictment states, they paid pre-existing athletic programs for enrollment documentation and then enrolled students in a charter school during the summer, collecting about $2,000 per student from the state of California.
Other components of the alleged scheme involved backdating student enrollment information, dually enrolling students from private schools to the charter schools, and transferring students from one school to another, again to collect additional state funding, which is partially determined by average daily attendance.
The indictment alleges that Schmitt was involved in several components of the fraud and accuses him of multiple counts of conspiracy to commit a crime and misappropriation of public money.
On one count, it alleges that he “committed two or more related felonies” related to “the taking and resulted in the loss by another person and entity of more than five hundred thousand dollars.”
His attorney, Eric Beste, working for Barnes & Thornburgh LLP, said he could not comment on much of Schmitt’s case because of the ongoing litigation, but he emphasized that Schmitt was a salaried employee and not an A3 business owner.
“There’s been some comments in the media about people making millions and millions of dollars in this business,” Beste said. “There may be other people who fall into that category, but that’s not Justin.”
He said Schmitt pleaded not guilty.
Schmitt is a product of Dolores High School himself, according to his online bio. After graduating from Fort Lewis College, he served as a teacher and then an administrator in both physical and online schools, according to a motion filed by his attorneys.
He held leadership roles with Mosaica Online Academy, which ran into financial difficulties. Many of the management contracts for Mosaica’s online schools were purchased by Foundation Learning, which retained Schmitt to continue operating some of the schools.
The online schools were eventually renamed “Valiant Academy.” A3 purchased the Valiant schools in California in early 2017, according to the motion.
The San Diego district attorney has charged 11 defendants – some of whom are employees and some of whom are just associates, Beste said.
“Everybody’s under pleas of not guilty,” he said. “No one has admitted anything; no one’s been convicted of anything yet.”
Beste is contesting the allegations and is in conversations with the San Diego District Attorney’s Office, he said. The district attorney’s office is aware of Schmitt’s new post in Dolores and has raised no objections, he added.
Currently, the next proceedings in this case are scheduled at 9:30 a.m. Oct. 30 in the San Diego Superior Court, Central Division, Central Courthouse.
Leadership changes in DoloresThe Dolores School District has experienced a tumultuous few years in terms of leadership changes. In May 2018, Scott Cooper resigned as superintendent of the district to take a job as assistant superintendent of Mesa Valley County School District 51 in Grand Junction.
Phil Kasper assumed the job of interim superintendent a few months later, and Lis Richard, hired in May for the post, began working for the district July 1. Prior to coming to Dolores, Richard served as superintendent in the Creede School District.
In other leadership changes, the district also lost both elementary and secondary principals in recent months. Elementary Principal Gary Livick announced his resignation late February, and Secondary Principal Jen Hufman just a few weeks ago – her last day was Sept. 30.
Richard addressed the recent changes, in particular the resignation of Hufman, in her letter to parents. “We do not plan to put anyone in place as an interim principal,” she wrote. “We currently have staff that can fill in and cover needed areas until we hire a new principal. There have been many interested in the position and we begin interviews the week of October 7.”
She added too that Schmitt has applied for the principal position. “He will be considered in a fair and non biased manner as all of the candidates will,” she wrote.
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