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School founder defrauded taxpayers of $116,000, auditor says

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By Anthony Gottschlich, Staff Writer Updated 5:51 PM Thursday, August 13, 2009

DAYTON — The founder of a Dayton charter school faces grand theft charges for allegedly using his private business to defraud the school and Ohio taxpayers of more than $116,000, the Montgomery County Prosecutor’s Office said Thursday, Aug. 13.

The prosecutor’s office has approved two counts of grand theft against Joe Singleton, founder of the now-closed Main Street Automotive Magnet School, said Kara B. Landis, executive assistant to Prosecutor Mathias H. Heck Jr.

Ohio Auditor Mary Taylor released an audit Thursday finding Singleton used his charter school management company, RJ Investments, as a front to bilk the school out of $116,678 in the 2006-07 school year.

The report said Singleton used some of the money to purchase a golf cart and security system for personal use. He also used his company to bill the school $60,202 for transporting students to and from school facilities. However, Singleton was never licensed by the state to transport students, as required by Ohio law, nor was he able to produce any records proving he ever provided students with transportation.

Auditors also found Singleton:

deposited $13,342 into RJ Investments’ bank account to pay for a security system and security equipment that was never installed;
spent $9,963 for the installation of a security system at a warehouse that his mother owns at 212 S. James H. McGee Blvd. The building is not affiliated with the school. In a response noted in the audit, school officials explained they had planned to use the building for laboratory space, but the plans fell through.
paid $5,990 to a local car dealership for an E-Z-GO Golf Cart.

“I just think it’s especially egregious when you’re stealing money that’s intended to be used for the education of children,” Taylor said in an interview Thursday.

Singleton could not be reached for comment.

Taylor said Singleton admitted to auditors that he created fake invoices to make many of the purchases outlined in the audit. He created an invoice for the purchase of classroom chairs, computer desks and cafeteria refrigerators, for example, then used the check he received from the school to purchase the golf cart for his personal use.

Auditors also found the school paid more than twice the market rate to sublease rooms in a Vandalia building for automotive laboratory space. The school paid $15,570 to use the classrooms for 21 months, but auditors found the school was already leasing the space, plus an extra room, for $7,350. Furthermore, students never used the space during the entire time.

Auditors also found the school didn’t properly track its capital assets, lacked supporting documents for numerous expenditures and didn’t maintain proper enrollment records, which the state uses to calculate funding levels.

Located at 440 Hunter Ave. near Kettering Field, the school opened in 2004 and received $293,000 in state funding that school year, according to the Ohio Department of Education. It collected another $2 million in state aid over the next three years, changed its name to Pace Career Central and enrolled up to 128 students.

The school’s sponsor, Lucas County Educational Service Center, suspended the school from operations on Aug. 7, 2008 for failing to meet state and federal requirements for student performance and staffing. The sponsor closed the school July 14 this year after it failed to follow up on a corrective action plan, which included severing ties with Singleton and RJ Investments, said Frank Stoy, an educational consultant with LESC.

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