The founder of one of California’s largest charter school networks was indicted Tuesday on 113 felony counts and accused of siphoning millions in public school funds, prosecutors said.
C. Steven Cox, founder of the now-defunct California Charter Academy, was indicted on 56 counts of misappropriation of public funds and 56 counts of grand theft, said Michael Fermin, a supervising deputy district attorney. Cox was also accused of failing to file a state tax return, he said.
The grand jury also indicted Tad Theron Honeycutt, a Hesperia city councilman, on 15 counts of misappropriation of funds, 15 counts of grand theft, three counts of failure to file a state tax return and one count of filing a false tax return.
They are accused of transferring more than $5 million in charter school funds to the network’s private management firm to cover expenses, Fermin said.
Cox, 59, pleaded not guilty and was jailed with bail set at $1 million. If convicted of all counts, he could face 64 years in prison. Honeycutt, 44, also entered a plea of not guilty to all charges and was jailed in lieu of $500,000 bail. He faces a maximum 20 years in prison if convicted.
San Bernardino County prosecutors began their investigation after the release of a state audit in 2004 that detailed problems with the finances and operations management at the schools.
Audit: Money went to salaries, perks
The audit charged that Cox routinely looted millions from public schools to enrich his friends and family, leading to the academy’s collapse. Auditors wrote that California Charter Academy and its private management firm, Educational Administrative Services Corp., spent millions on hefty executive salaries, perks and questionable contracts awarded to Cox’s friends and family.
At their peak, Cox’s four schools enrolled 4,500 children and 7,000 adults at 50 satellite campuses from Gridley, north of Sacramento, to near the Mexican border. The academy shut down in August 2004 as the state began its investigation.
State Superintendent of Public Instruction Jack O’Connell called the indictment “welcome news in a very sad story” and said the state would still try to collect $23 million from the academy in bankruptcy proceedings.
Cox and Honeycutt are charged with transferring $5.5 million from the charter school funds to the for-profit Educational Administrative Services Corp. to cover escalating expenses, Fermin said.
Cox was the chief executive of EASC and the California Charter Academy. Honeycutt was the head of corporate development for EASC, Fermin said.
The pair are due in court Thursday.
Cox’s home phone number was unlisted, and a cell phone number was no longer in service. A message left on an answering machine at a telephone listing for Honeycutt was not returned.