A recent report from the State Treasurer’s Foundation and Open the Books reveals almost 90 suspected fraud schemes totaling around $225 million across schools in the U.S. since 2019.
The report claims various districts manipulated funds—through generating false invoices, misrepresenting student enrollments for more aid, and colluding for kickbacks.
SFOF and Open the Books analyzed semiannual reports submitted to Congress by the U.S. Department of Education’s Office of Inspector General from 2019 to 2026, identifying fraud in 24 states and Puerto Rico.
“All fraud is harmful, but education fee fraud aimed at helping children learn and succeed is especially egregious. The findings of this report should serve as a warning to all families, teachers, and civic leaders, especially since they only scratch the surface of the problem,” stated SFOF CEO OJ Oreka.
In Indiana, schools inflated enrollment figures and received $44 million more in state funding than appropriate between 2016 and 2018. Four individuals from Indiana Virtual School and Indiana Virtual Pathways Academy, including the founder, allegedly orchestrated a fraud scheme, diverting millions to a fraudulent company. They even terminated an employee who attempted to report the wrongdoing to the education department. Following the closure of the school in 2019, the group faced indictment by the Department of Justice in 2024.
“Such plans within public schools are arguably hitting America’s future leaders where it hurts the most. Every dollar wasted on fraud will never reach the classrooms where it is urgently needed,” commented Open the Books CEO John Hart.
In Broward County, Florida, a public school information officer, Anthony Hunter, is suspected of directing $17 million in taxpayer funds to a friend’s business without going through the mandated bidding process. He allegedly funneled funds to Georgia resident David Allen’s company, Education Consultants, from 2015 to 2019. Although indicted in 2021, a judge dismissed the charges in 2024, claiming the grand jury lacked jurisdiction over the matter.
“This report is a reminder that America doesn’t necessarily need more laws. We need to enforce the ones we have. Every dollar siphoned from our education system by self-serving crooks will not further our children’s education,” argued Nicole Neily, Chairman of Defense Education.
The Houston Independent School District reportedly experienced a $6 million fraud scheme involving two individuals who accepted cash bribes and home improvements related to district contracts. Chief Operating Officer Blaine Buzbee and contractor Anthony Hutchinson, along with five other school officials, were indicted for conspiracy. After learning of a federal investigation, Buzbee and Hutchinson attempted to obstruct it, and authorities discovered $186,000 in cash at their residence.
“Since June 2023, eliminating waste has been our top priority. Every decision we make is focused on closing student achievement gaps, preparing students for the future, and supporting teachers,” remarked Houston Independent School District Superintendent Mike Miles.
In 2025, Michael David Baker, the former maintenance director for Boone County Schools in West Virginia, pleaded guilty to embezzling $3.4 million, which equated to over $1,000 per student. The misappropriated funds were allegedly used for personal expenses, including vehicle purchases and home renovations. Baker allegedly falsified records to show that the school was receiving supplies, but in reality, a significant portion of the orders were never fulfilled.
“With rising distrust among parents due to various issues in the education system, it’s concerning. More than $230 million of taxpayer dollars are squandered on unnecessary items, hindering students from gaining essential skills in reading, math, and science,” said Allie Mare of the American Parents Federation.
Only a few of the largest school districts were examined in the report, but many smaller districts reported similar concerns. The issue of educational funding is increasingly troubling as families face economic challenges, with about one in three low-income households spending nearly all their income on basic needs. For these families, every dollar lost to fraud could mean less support for their children’s education.
