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Former Charter Schools Treasurer Charged with Embezzling Federal Funds

Thursday, May 17, 2012

Columbus – Carl W. Shye Jr., 57, of New Albany, Ohio was charged with embezzling more than $470,000 in federal funds between 2005 and 2011 while serving as treasurer for a number of community schools in Ohio.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Auditor of State Dave Yost; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI); and Executive Director Paul Nick of the Ohio Ethics Commission announced the charge contained in a one-count bill of information filed today in U.S. District Court for the Southern District of Ohio.

“School treasurers bear the solemn responsibility of protecting public funds,” Stewart said. “Shye is accused of willfully and negligently abusing that position of public trust.”

Upon taking office in January 2011, Auditor Yost quickly noticed a pattern in problem audits around the state involving Shye.  In February 2011, the Auditor of State’s office contacted the FBI to launch a joint investigation into Shye’s involvement in community schools across Ohio.  Auditor of State investigative and audit staff worked through 17 audits and issued 62 findings for recovery against Shye over the last 10 years, totaling $1,012,490. 

“Carl Shye has run amok with taxpayer dollars for a decade, but his run ends today,” Auditor Yost said.  “I am proud to see the culmination of countless hours of work and the strong partnership between the Auditor of State’s office and law enforcement to stop this crime against the public.”

Under Ohio law, community schools or charter schools are public, nonprofit, nonsectarian schools that operate independently of any school district but under a contract with a sponsoring entity.  The schools involved include the former George Washington Carver Preparatory Academy in Columbus, the former Legacy Academy for Leaders & the Arts in Youngstown, the former NuBethel Center of Excellence and New City Community School, both in Dayton.

“The laws that protect the public from wrongdoing at traditional public schools apply equally to community schools,” said Executive Director Nick.  “Taxpayers expect that school officials and employees will use tax dollars for student education, not fraud and self-dealing.”

Embezzlement from a program receiving federal funds is punishable by up to ten years in prison, a fine of up to $250,000 and three years of supervised release.

The charge also seeks forfeiture of $472,579.90, which represents or is traceable to the gross receipts Shye obtained through the alleged embezzlement.

U.S. District Judge Gregory L. Frost, who is presiding over the case, has scheduled Shye’s arraignment for June 21 at 10 a.m.

Stewart acknowledged Ohio Attorney General Mike DeWine, whose office provided assistance in the investigation and conducted civil proceedings against Shye.

Charges contained in an information are allegations only.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,600 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Contact:
Carrie Bartunek
Press Secretary
614-644-1111