If convicted, Councilman Tad Honeycutt faces up to 20 years in prison for his part in the alleged mismanagement of $5.5 million in taxpayer funds.
A little over three years after California Charter Academy, the state's biggest chain of charter schools, shut its doors, indictments were handed down Tuesday morning against CCA founder C. Steven Cox and Honeycutt.
Between them, the pair face 117 felony charges.
"It's an important day for San Bernardino County," District Attorney Michael A. Ramos said at a Tuesday afternoon press conference.
Honeycutt is charged with 15 counts of Misappropriation of Public Funds, 15 counts of Grand Theft, three counts of failure to file a state tax return and a single count filing a false tax return. If convicted, Honeycutt could face 20 years in prison.
Phelan resident Cox is charged with 56 counts of Misappropriation of Public Funds, 56 counts of Grand Theft and a single count of failing to file a tax return. If convicted, Cox faces up to 64 years in prison.
The charges specifically relate to 37 cases of funds being transferred from the non-profit CCA to for-profit entities intended to provide school services for a lower cost. Honeycutt headed up one such entity, Everything For Schools, that an April 2005 audit commissioned by the California Department of Education said marked up schoolbooks by more than 50 percent before reselling them to CCA schools.
"As the district attorney of the county, I was one of the first to read that audit," Ramos said. "As a former school board member, it turned my stomach a little bit."
Calling CCA students the "true victims," Ramos said the pair served themselves "on the backs of the students."
Deputy District Attorney Michael Fermin will be the lead prosecutor on the case, and had the "enormous task of getting through the paperwork and the witnesses," Ramos said.
"There was not a day where he was not working on this case and he's not finished," he said.
"Our qualm ... is when a private business is so close to a public entity," Fermin said. "Can they transfer money to cover expenses without prior authorization? ... The answer is clearly no."
Honeycutt has previously maintained the expenses paid for by EFS and other for-profit arms of CCA -- including forays to Disneyland and the purchase of high-end jet skis -- were not criminal, and that private companies can spend their profits however they wish.
"If anything," Fermin said of the expenses, "That's motive."
"There are some very good charter schools in San Bernardino County," San Bernardino County Superintendent of Schools Herbert Fischer said at the press conference. "This charter school ... was focused more on revenue and less on children. ... I'm pleased to see those that have misused funds that were meant for children brought to justice."
Honeycutt and Cox were booked into Victor Valley Jail. Bail is set at $500,000 for Honeycutt and an even $1,000,000 for Cox. Both pleaded not guilty to all charges at their arraignment.
The pair are scheduled to appear in Victorville Superior Court on September 7.
Beau Yarbrough can be reached at 956-7108 or at firstname.lastname@example.org.