2 men plead guilty in California charter school fraud case

SAN DIEGO (AP) — An Australian man and his Southern California business partner who ran more than a dozen charter schools pleaded guilty Friday to felony charges tied to a massive fraud scheme that siphoned $50 million in education funds from the state to invest in start-up companies and real estate.

Prosecutors called it one of the nation's biggest fraud cases involving education dollars.

Sean McManus, 46, entered his plea from Australia via a video call to San Diego Superior Court. He agreed to voluntarily return to the United States as part of his plea agreement.

He and his business partner, Jason Schrock, 44, pleaded guilty to conspiracy to misappropriate public funds and to stealing more than $500,000.

Schrock also pleaded guilty to one count of conflict of interest. Both face up to 10 years in prison. The defendants nor their attorneys could be immediately reached for comment.

Their company, A3 Charter Schools, operated 19 charter schools across California, according to a 235-page indictment filed in San Diego County Superior Court.

As part of their plea agreements, the two men agreed to assist in the return of more than $210 million in assets, which included 13 houses and various shares in third-party companies.

“With these guilty pleas, the defendants now admit they engaged in a devious, systematic public corruption scheme on the backs of students, their parents and the public that diverted millions of taxpayer dollars into their own pockets,” District Attorney Summer Stephan said. “This is one of the largest fraud schemes targeting education dollars for K-12 students in the nation.”

McManus and Schrock knowingly collected public funds for summer school from students already in other, unrelated programs. McManus and Schrock then defrauded the state...