PHOENIX — Five individuals were indicted this week for allegedly operating a criminal conspiracy inside the state's school voucher program, also known as the Empowerment Scholarship Account program, Arizona Attorney General Kris Mayes said in a news conference on Thursday.
The indictment charges the suspects with fraud, forgery and money laundering.
"The defendants in this case we are announcing today took advantage of the lack of controls and regulations and apparently easily defeated and defrauded the ESA program," Mayes said during the news conference.
Mayes said 17 children were used in the scheme and five of them were completely fake. False birth certificates were also used to obtain funding from the school voucher program. All 17 children had false disability documents associated with them to receive even more funding, Mayes said.
Tom Horne, Arizona superintendent for public instruction and vocal advocate for the ESA program, called Mayes' accusations he didn't know anything about the fraud "not true."
“As a former attorney general I have no tolerance for fraudulent activity or for misspending of funds,” Horne said.
Cost of fraud
Mayes said the defendants are accused of defrauding Arizona taxpayers of more than $600,000. Three of the individuals are former employees of the Arizona Department of Education.
The suspects listed in the indictment are Dolores L. Sweet, Dorrian L. Jones, Jennifer Lopez, Jadakah C. Johnson, and Raymond L. Johnson, Jr.
"My overarching concern here is this is a program that is a program that is easy to target for fraud," Mayes said. "The Legislature has never appropriately funded the administration of this program."
Mayes said the investigation began in August of last year after her office received a tip from a credit union that flagged unusually large cash withdrawals.
Mayes said she could not comment on the use of the funding but did mention she would categorize it as "luxury goods."
"A lot of things are being bought that you would not associate with educational activities, let's put it that way," Mayes said.
Mayes said she has been "long concerned" about the potential for fraud, waste and abuse in the ESA program.
"What I'm most concerned about is how ripe this program clearly is for this kind of abuse," said Mayes. "It was very easy for these individuals to do this."
Fraudulent children
Mayes said the defendants allegedly approved ESA applications for children real and fictitious.
The defendants allegedly created "ghost students" with forged certificates, children that didn't exist and gave them fake disability diagnoses that would make them eligible for larger funding amounts, Mayes said.
Mayes said she believes the universal expansion has “degraded” services for students with disabilities, who Mayes said the program was originally intended for.
"This fraud is a slap to the face for any parent who has children with disabilities," Mayes said. “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.”
Sweet, an ESA account specialist who was employed from 2019 to 2023, approved accounts for three fictitious children she claimed were her own triplets.
Lopes, an ESA program lead specialist from 2019 to 2023, also approved two applications for fictitious children. The two children were allegedly twins.
All five of the fictitious children had the same birthday: Aug. 8, 2016, Mayes said. They were accepted into the program in early 2023.
“And apparently none of this raised any red flags at the Arizona Department of Education, Mayes said.
Horne, others respond
Horne disputed Mayes’ claim that his office did not bring cases of fraud to the attention of the attorney general. He said two of the three cases she spoke of were brought to her attention by his office.
“The one case that was not, wasn’t a result of heroic action by the attorney general’s office. It was discovered by a credit union and they happened to go to her rather than go to us,” Horne said. “Aside from the case discovered by the credit union, all of these cases came to her from us.”
Horne said his office sent the attorney general another seven cases, which “she did not talk about.” The cases Horne mentioned are:
One person with five students, three of them with fraudulent birth certificates
One person with four students, three of them with fraudulent birth certificates
One case of a fraudulent teaching certificate
Horne claims except for the case flagged by the credit union, his office sent all of the cases of fraud Mayes has.
“When I was the attorney general, I always gave credit to people who deserved credit, her philosophy is the opposite,” Horne said. “Not only does she not give credit, but she is not truthful on saying that we didn’t flag them.”
Mayes said during her news conference that John Ward, head of the ESA program, has been cooperative in the investigation, but did not say the same of Horne.
"I can't say that it's very cooperative of Tom Horne to go around and claim that there's no fraud in this program when there clearly is," Mayes said.
The author of the ESA expansion, Arizona House Speaker and Republican Rep. Ben Toma, has said he does not support new regulations to the program.
Toma told 12News Thursday he is pleased to see the indictment and said it reflects attempts by criminals to exploit state programs, not just ESAs.
“These indicted former employees, hired under former Superintendent Hoffman, began defrauding the state well before the passage of universal ESA. Under ADE’s new leadership, we’ve been pleased to see the development of techniques to stop attempts to defraud the program,” Toma said.
Arizona Education Association President Marisol Garcia released the following statement in response to Mayes' news conference.
"As every new headline makes clear, Arizona's ESA voucher program has been a complete disaster. The utter lack of accountability and transparency makes this program ripe for fraud and abuse," Garcia said in a news release. "And yet ESA voucher proponents have blocked even the most basic, common-sense safeguards. It's time to rein in the ESA voucher program before it spins even further out of control."
More on ESAs
The issue of school vouchers in Arizona has become increasingly fraught between Republicans and Democrats in recent years. Conservatives have pushed for expanding the ESA program under the argument that it supports school choice, while liberals decry that vouchers take away resources from public schools.
Created more than a decade ago, the ESA program allows families to use public funds to cover private-school tuition and other education costs.
Gov. Katie Hobbs has recently vowed to add more accountability to the voucher program.
The program was designated for vulnerable populations until it was dramatically expanded in 2022 to include all students. Since the universal expansion, the program has grown from 12,000 students to more than 75,000 students.
Here are a few links to our previous coverage of ESA vouchers:
- Tom Horne is hiring a new investigator for school voucher spending. His first investigator had some baggage
- Do Arizona school vouchers save taxpayer dollars? Here's what an independent researcher says.
- 3 women facing charges in alleged ESA, health care schemes
- There are 48 school districts in Arizona that don't receive state aid. They have to pick up the full tab for a student leaving on an ESA.
- Ex-boyfriend tipped off investigators to ESA, health care fraud suspect
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