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The former head of a St. Louis Charter school was sentenced for his role in a $2.4 million education fraud scheme

Written by Mamie M. Arndt


a bird sitting on a wire fence: A padlock is clipped to the fence of a closed public schoolhouse on May 30, 2017 in Newburgh, New York. DON EMMERT/AFP via Getty Images


© DON EMMERT/AFP via Getty Images
A padlock is clipped to the fence of a closed public schoolhouse on May 30, 2017 in Newburgh, New York. DON EMMERT/AFP via Getty Images

  • The former head of a St. Louis charter school was sentenced to over a year in prison for defrauding the state.
  • Michael Malone, 42, pleaded guilty to repeatedly inflating St. Louis College Prep’s attendance numbers for more funding.
  • Nearly half of all charter schools in St. Louis opened since 2000 have closed for academic or financial failures.
  • Visit the Business section of Insider for more stories.

The former head of a St. Louis charter school was sentenced to 12 months and one day in prison for his role in a $2.4 million fraud education fraud scheme, according to the Department of Justice.

Michael Malone, 42, pleaded guilty in August in the Eastern District of Missouri to three counts of wire fraud in a scheme to defraud and obtain education funds from the state of Missouri for the St. Louis College Prep Charter School.

Malone was the founder of the college preparatory school and served as its executive director from the school’s first year, 2011, until his resignation in 2018.

As a charter school, St. Louis College Prep’s funding was based on the school’s average daily attendance, not total enrollment. According to court filings, Malone repeatedly lied about the school’s average daily attendance to Missouri’s Department of Elementary and Secondary Education to obtain more money. 

In four out of the seven years that the school operated, Malone reported an average daily attendance higher than the charter school’s actual enrollment. During the 2016-2017 school year, for example, Malone reported an average daily attendance of 326 when the school’s enrollment was only 290 students.

Unlike some schools, St. Louis College Prep ran on a year-long school schedule with an extended school day, however, state prosecutors allege that Malone only reported a school calendar with the minimum school year days and hours required by the Department of Elementary and Secondary Education and state law. Malone used this trick to claim any additional operational days as summer school or remedial hours which resulted in an increase of state funds.

The school never actually had summer school or remedial instruction hours and were labeled as such only to defraud the state for more funding.

Through his scheme, Malone was ultimately able to obtain $2.4 million for the school’s operations. Prosecutors allege that the money gave the school a competitive advantage over public and other charter schools in the area as any St. Louis resident student recruited to St. Louis College Prep resulted in more funds for the charter school and a decrease in funding for the public school the student was leaving.

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According to court records, Malone concealed the scheme for years by lying to school staff members responsible for maintaining daily attendance records and further lying to Department of Elementary and Secondary Education representatives when approached about the accuracy of the records.

The school closed in 2019 after the investigation by Missouri State Auditor Nicole Galloway brought Malone’s fraud to light. St. Louis College Prep ultimately closed with only one graduating class and was among the lowest-achieving charter schools in St. Louis in state testing with just 24% proficiency in English exams and just proficiency 15% in Math tests.

Nearly half of all charter schools opened since 2000 in St. Louis have been shuttered for academic or financial failures, according to the St. Louis Post-Dispatch.

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Mamie M. Arndt