Three former employees of the state’s education department were indicted this week for defrauding Arizona’s private school voucher program for more than $600,000.
The trio face a litany of charges, including conspiracy, forgery, money laundering and fraud for falsifying the enrollment documents and special education evaluations of 17 students — five of whom don’t even exist — to receive voucher funds via Arizona’s Empowerment Scholarship Accounts program.
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ESA vouchers allow students to attend a private school or be educated at home. Republican lawmakers opened up the program to every student in the state in 2022 with a universal expansion. Previously, funds were reserved for those in D or F rated public schools, with military families or with special education needs.
The expansion has been widely blamed by critics for turning the program into a free for all for wealthy Arizonans after an explosion of new applicants turned out to be private school students with no prior public school history. Since then, ESA vouchers have repeatedly come under fire from Democrats and public school advocates for the program’s ballooning cost to the state and permissive funding policies that allow for piano and luxury car driving lessons to be classified as approved expenses.
Contention over the ESA program’s lack of legislative regulation flared up on Thursday, when Arizona Attorney General Kris Mayes, whose office spearheaded the investigation into the three fraudsters, denounced the program as “ripe” for abuse.
The Democrat outlined how the trio and two other adults, who are the children of one of the former Arizona Education Department employees, were able to fabricate birth certificates and special education records to fool the system. Students with special needs are awarded larger grant amounts than their peers.
Mayes criticized the Republican-majority legislature, which has been unwilling to regulate the program, as part of the problem.
“My overarching concern here is this is a program that is easy to target for fraud,” she said. “The legislature has never appropriately funded the administration of this program. And the lack of controls, regulation and appropriate oversight make the voucher ESA program a target for fraudsters.”
Former employee Delores Lashay Sweet falsified paperwork asserting that non-existent triplets children lived at her home. And non-existant twins allegedly lived with former employee Jennifer Lopez. All five “ghost” children shared the same birthday. As many as 10 ESA recipients were registered as living at Sweet’s home.
Sweet, Lopez and a third former employee, Dorrian Lamar Jones, were all part of the ESA department staff and approved applications for the program.
Mayes said her office was tipped off about Sweet by a credit union, and questioned why a red flag wasn’t first raised by the state education department. She attributed that failure to the program’s massive enrollment growth, saying the universal expansion has jeopardized applications from deserving students.
“That universal expansion has degraded services for students with real disabilities who have relied on the program and for whom it was originally designed,” she said. “This fraud is a slap to the face of any parent who has children with disabilities. They now have to compete for the time and resources of ADE staff with tens of thousands of new students in the program, many of whom were already attending private schools on their parents’ dime before this taxpayer funded coupon for the wealthy was passed by the legislature.”
The solution, Mayes said, lies with the legislature.
“It is high time for the legislature to get serious about putting some regulations in place to prevent the fraud that we’re seeing today from happening in the first place,” she said.
She said, he said: ESA supporters respond
Superintendent of Public Instruction Tom Horne, a Republican, called Mayes’ assertions false and lashed out at her. He noted that only Sweet was flagged by the credit union; Lopez and Jones were both referred to the AG’s Office by the Department of Education. That, he said, proves the department is on top of any issues.
According to AG spokesman Richie Taylor, the two were terminated by the state education department after the AG’s office reached out with concerns about Sweet.
Horne added that the trio were hired under his predecessor, Democrat Kathy Hoffman, and said that, under his leadership, the department was better focused on rooting out fraud.
John Ward, the leader of the ESA program, said verification policies are in place and working. A 19-year veteran of the Arizona Auditor General’s Office, he was hired after the program’s former head abruptly resigned, and was shortly afterwards implicated in a data breach that exposed the information of thousands of ESA accounts to a single parent.
Ward said eight enrollment specialists review applicant documents and report suspicions to their supervisors. The entire ESA program, which now serves over 70,000 students across the state, is staffed by 32 employees.
Horne pointed out that many government programs are targeted by fraud, and vowed to continue safeguarding ESAs against it. But, he said, action from the state legislature isn’t needed because current processes are sufficient.
“The unfortunate fact is that the department is not alone in having been victimized by fraud,” he wrote in an emailed statement. “According to the Auditor General’s Financial Investigation Reports and Fraud Prevention Alerts website, over the past 30 years there have been multiple incidents of fraud committed against government entities, including various state agencies, law enforcement and many school districts.”
House Speaker Ben Toma, who spearheaded the universal expansion in 2022, echoed Horne, saying that fraud is rampant across government programs and that state laws already exist to hold criminals accountable. The Republican from Glendale dismissed Mayes’ criticism of the program as nothing more than political opportunism.
“It’s regrettable that critics of Arizona’s highly popular and successful ESA program are predictably seizing this opportunity to politicize and undermine it,” he said.
A hearing in the indictment against the three former employees and two other adults involved in the alleged crimes who are the children of Sweet is set for March 28.
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