Explosive report finds $225M in alleged K-12 education fraud amid Trump’s crackdown: ‘Especially hideous’
FIRST ON FOX: A coalition of state finance officials said it uncovered nearly $225 million in alleged fraud at America’s schools over the past six years and identified nearly 90 cases involving embezzlement, fake invoices, inflated enrollment, bid-rigging and kickbacks.
One new report Obtained exclusively by Fox News Digital, the State Finance Officers Foundation (SFOF) and Open the Books analyzed Department of Education Office of Inspector General (OIG) Semi-Annual Reports submitted to Congress between October 1, 2019 and March 31, 2026, uncovering allegations of fraud in 24 states and Puerto Rico.
“All fraud is harmful, but defrauding of education funds intended to help children learn and succeed is especially heinous,” SFOF CEO OJ Oleka said in a statement to Fox News Digital. he said.
“The findings in this report should alarm every parent, teacher, and civic leader, especially because they only scratch the surface of the problem. State finance officials who have historically bravely pursued every misappropriated school dollar have had a bloated federal education bureaucracy make their job even harder.”
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The findings come as the Trump administration, Vice President J.D. Vance, prioritizes the fight against corruption across the country. “War on Fraud” raises new questions about oversight of federal education spending. About $67 million was ordered to be repaid through court orders or settlements, but it’s unclear how much was actually recovered.
Oleka said the report was a reminder that state oversight “has never been more important.”
Only three of the nation’s 20 largest federally funded school districts were listed in OIG records, according to the report. There were 17 people left; federal investigations have targeted dozens of small districts, charter schools, online schools and educational programs, highlighting potential gaps in federal oversight.
“With this in mind, stronger oversight of the federal education budget is more than some bureaucratic exercise; it is an economic and moral imperative,” the report said. “Families deserve assurance that the public institutions that will serve their children are not being plundered by the officials charged with leading them.”
Open the Books CEO John Hart said the alleged fraud “hits us where it hurts the most” because it changed “America’s future leaders,” adding that in one case the fraud loss per student was enough to fund a semester at a charter school.
“These plans for public schools probably hit us where it hurts the most: America’s future leaders,” Hart said. he said. “Every dollar spent on fraud never reaches the classroom that is urgently needed. Until we clean up both the fraud and the administrative burden, student outcomes will continue to be negatively impacted.”
Among the report’s biggest cases were allegations of two people. now closed Indiana online charter schools received $44 million in excess funding by increasing enrollment, and a tutoring company in Puerto Rico received $24 million by billing for services that were never provided. In Florida, a Broward County Public Schools information officer allegedly diverted $17 million in contracts to a friend’s business, bypassing competitive bids and profiting personally from the deals.
Education Secretary Linda McMahon testifies at a House Appropriations Committee subcommittee budget hearing on the Department of Education on Capitol Hill in Washington, May 21, 2025.
In Texas, former Houston Independent School District Chief Operating Officer Brian Busby and contractor Anthony Hutchison allegedly orchestrated a scheme. fraud scheme More than $6 million included school construction and grounds maintenance contracts and hundreds of thousands of dollars in home renovations in exchange for cash bribes.
A federal jury found Busby and Hutchison guilty of conspiracy, bribery, filing false tax returns and witness tampering; Hutchison was also found guilty of seven counts of wire fraud. US Attorney’s Office For the Southern District of Texas.
“Bureaucratic bloat, insider trading, and poor oversight led Governor Abbott and the Texas Education Agency to intervene in HISD and appoint new leadership,” HISD Superintendent Mike Miles told Fox News Digital. “School funding was being wasted, the quality of schools was deteriorating and the education of the majority of students was being neglected. This is no longer the case. Since June 2023, we have made eliminating waste a priority and, most importantly, every decision we now make focuses on closing student achievement gaps, preparing students for the future and supporting teachers.”
The report suggests that the alleged fraud poses a direct cost to students in small school districts, and that the true cost is likely even higher because not all fraud is detected, investigated, or prosecuted.
California held responsible two of the report’s costliest cases.
Students at the now-closed Community Preparatory Academy charter school lost nearly $9,090 per student after the school’s principal used $3 million in taxpayer money for personal travel, restaurants, online shopping and private school tuition for her children, according to the report. In the Magnolia School District, students lost approximately $3,553 per student after a former financial services director allegedly embezzled approximately $16.7 million to purchase a luxury home, car and designer goods.
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In addition, students at Boone County Schools in West Virginia lost approximately $1,096 per student after a former maintenance manager stole $3.4 million through fraudulent invoices for cleaning and storage supplies that were never delivered and used the proceeds to purchase tools, equipment, and make improvements to his home.
The report also cited Chicago Public Schools, which agreed to return nearly $1 million in federal grant funding after an OIG review found the district failed to adequately verify student eligibility for the Indian Education grant program.
Fox News Digital has reached out to Broward County Public Schools, Chicago Public Schools, Magnolia School District and Boone County Schools for comment.
Alleigh Marré, executive director of the American Parents Coalition, said of the report: “highlights parents at their worst fears.”
“That’s why parents need to have a seat at the table to ensure that their children receive the best education possible and that schools are not wasting taxpayer money on materials that are not based on education,” Marré said.
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The report concluded that “every step should be taken to unwind enormous bureaucracy and expenses” by returning education to the state and local level.
“Not only is this in line with the founders’ vision of a limited Governing Body, but state and local officials are much better equipped to understand the needs of their communities, find efficiencies, innovate for better student outcomes, and keep the foxes out of the proverbial henhouse,” the report said. he said.
Department Spokesperson Ellen Keast told Fox News Digital that “rooting out waste, fraud and abuse across government is a priority for the Trump-Vance Administration.”
“Secretary McMahon is proud to serve on the Vice President’s Fraud Elimination Task Force and remains committed to delivering lasting results for American students and taxpayers, including nearly $2 billion in taxpayer savings to date,” Keast said. he said. “Misuse of taxpayer funds was rampant under the previous administration, so addressing this is a top priority.”
Original article source: Explosive report reveals $225 million in alleged K-12 education fraud amid Trump crackdown: ‘Particularly disgusting’
