Former charter-school treasurer makes plea agreement in embezzlement case

By Marc Kovac | June 22, 2012 at 12:00a.m.

COLUMBUS

A former treasurer of charter schools in Youngstown and other Ohio cities pleaded guilty Thursday to embezzling more than $470,000 in federal funding over a six-year period.

As part of a plea agreement, Carl W. Shye Jr., 57, who lives in the Columbus area, will forfeit money he took illegally and permanently surrender his accounting license, according to details released by state Auditor Dave Yost.

Shye also is on the hook for more than $671,000 in civil judgments and faces up to 10 years in prison and additional fines.

“Carl Shye broke the law and the public’s trust — now he’ll pay the price,” Yost said in a released statement. “Today’s court proceedings are the next step in bringing justice to Ohio’s taxpayers.”

Spending issues came to light after Yost’s office identified a pattern of problem audits at charter schools in Dayton, Columbus and Youngstown where Shye served as treasurer. From 2005-11, a total of 17 audits noted 62 findings for recovery against Shye, totaling more than $1 million in potentially misspent money.

For example, an audit of the Legacy Academy for Leaders & the Arts in Youngstown last year noted 100-plus questionable financial transactions, including 90 checks totaling $483,923 to Shye for treasurer fees, loan repayments, software licenses and other services, according to Yost’s office.

According to documents, “Shye also admitted that he cut and pasted the signature of the then-deceased board member of one community school onto a copy of a false contract with the school after auditors requested a copy to try and verify his compensation.”

The incidents prompted legislation, introduced this session by Rep. Christina Hagan, a Republican from Alliance, that would require charter-school treasurers to be licensed. The bill also would increase criminal penalties for dereliction of duty and prohibit those who are convicted of such crimes from holding public office.

Shye offered his guilty plea Thursday in U.S. District Court here.