Former school official faces charges

Staff and wire reports

COLUMBUS

The former treasurer of a now-closed Youngstown charter school is charged with embezzling more than $470,000 in federal education funds over six years.

Carl W. Shye of New Albany handled the books for more than a dozen Ohio charter schools including Legacy Academy for Leaders and the Arts.

U.S. Attorney Carter Stewart filed an embezzlement count against Shye, 57, in U.S. District Court on Thursday.

Shye was treasurer for former charter, or community, schools in Columbus and Dayton as well as Legacy. Under Ohio law, such schools operate independently of any school district but under contract with a sponsoring entity.

State Auditor David Yost said he first spotted a pattern involving Shye from state audits. The auditor’s office issued more than $1 million in 62 findings for recovery against Shye over a decade.

Shye’s arraignment is June 21.

No one answered at a phone number listed for Shye.

Last month, Shye voluntarily surrendered his school treasurer’s license.

The Ohio Department of Education sent Shye a letter last February notifying him of the state board’s intention to “limit, suspend, revoke or permanently revoke” his five-year school treasurer’s license, citing six violations. The letter also informed Shye of his right to a hearing before the state board of education.

Last July, Yost’s office released a special audit of Legacy Academy, listing $352,000 in findings for recovery.

The charter school, which operated inside Mount Calvary Pentecostal Church on Oak Hill Avenue, closed at the end of the 2010-11 school year, citing declining enrollment. It had operated for 10 years.

Included in Legacy’s audit was a $233,923 finding against Shye. Auditors found that the academy had issued 90 checks to Shye totaling $483,923 including monthly treasurer fees, loan repayment, software licenses, compilation services, IRS audit meetings and audit-preparation services.

“Neither the academy nor Mr. Shye provided us with contracts, loan agreements, bills, invoices or any other valid supporting documentation to substantiate the amounts paid,” the July special audit said. “Additionally, there was no record of the governing board having approved the payments to Mr. Shye.”

Auditors gave Shye credit for services provided for $50,000 per year, or $250,000 for the period of July 1, 2005, through June 30, 2010.

During the time covered by the audit, academy checks typically were signed by the treasurer and the business manager.

“However, 73 of the 90 checks issued to Mr. Shye only included Mr. Shye’s signature or the signature for Business Manager Edward Boling was signed by Mr. Shye,” auditors found.