K-12 Fraudsters Stole $225 Million From Taxpayers in Seven Years —
One Administrator Spent It on Disney Cruises.
A joint investigation by the government-transparency nonprofit Open the Books and the State Financial Officers Foundation combed every U.S. Department of Education Office of Inspector General semiannual report to Congress issued between October 2019 and March 2026. It tallied nearly 90 confirmed fraud cases across 24 states and Puerto Rico — totaling $225 million in stolen or misspent K-12 funds, of which taxpayers have recovered only 30 percent.
The case that gives the report its headline hook happened in Democratic-run Los Angeles County. Janis Bucknor, executive director of the Community Preparatory Academy charter school, pleaded guilty to stealing $3,168,346 over five and a half years — and spent $220,614 of it on Disney cruises and theme-park trips before a federal judge sentenced her to home detention.
The single largest scheme in the report, $44 million routed through inflated Indiana virtual-school enrollment, happened under Republican state government — and two of its defendants go to trial after this story publishes. The report’s most alarming finding isn’t any one case: it’s that only three of the nation’s 20 largest school districts have ever been audited for fraud at all.
- $225 million — in confirmed K-12 fraud across ~90 cases in 24 states and Puerto Rico, Oct. 2019–March 2026 · Source: Open the Books / SFOF, “Schooled by Schemers”
- 30% — of the $225 million recovered or ordered repaid ($67 million) — 70% likely never comes back · Source: Open the Books / SFOF
- $44 million — the Indiana virtual-school “ghost student” scheme — the single largest haul in the report · Source: DOJ, USAO-SDIN
- $220,614 — of Janis Bucknor's $3.17 million theft spent on Disney cruises and theme-park trips · Source: DOJ, USAO-CDCA
- 3 of 20 — of the nation's largest federally funded school districts have ever appeared in an OIG fraud probe · Source: Open the Books / SFOF
Open the Books, a nonprofit led by CEO John Hart that publishes federal, state, and local spending records, teamed up with the State Financial Officers Foundation — a coalition of state treasurers and auditors led by CEO OJ Oleka — to read every ED-OIG semiannual report to Congress issued over roughly six and a half years. The result, “Schooled by Schemers: Fraud, Waste and the Money that NEVER Reached Kids,” released July 8–9, 2026, documents nearly 90 confirmed cases spanning 24 states and Puerto Rico.
“All fraud is harmful, but defrauding education dollars meant to help kids learn and succeed is especially hideous.”
OJ Oleka, CEO, State Financial Officers Foundation
Open the Books communications director Christopher Neefus put the pattern in blunter terms: “There’s so much talk about getting more dollars into the classroom to improve student outcomes, and here are folks who have taken it to buy sports cars instead of school supplies.” Of the $225 million identified, only about $67 million — 30 percent — has been recovered or ordered repaid through restitution.
Janis Bucknor, 52, ran Community Preparatory Academy, a charter school in Carson and South Los Angeles, in Democratic-run Los Angeles County. Federal prosecutors say she embezzled $3,168,346 from the school over five and a half years and used it to fund a lifestyle the school’s ledgers were never supposed to touch — $220,614 of it on Disney cruises and theme-park trips. She pleaded guilty to theft and tax evasion and was sentenced to 36 months of home detention and ordered to pay $2.86 million in restitution.
The larger California case belongs to Jorge Armando Contreras, 53, senior director of fiscal services for the Magnolia School District in Orange County. Between 2016 and 2023, prosecutors say he altered more than 250 checks to steal $16,694,942. He pleaded guilty and was sentenced to 70 months in federal prison with full restitution ordered; investigators seized roughly $7.7 million in assets, including a BMW, 57 designer handbags, jewelry, and luxury tequila.
The report’s single largest scheme did not happen in a Democratic-run jurisdiction. Indiana Virtual School and Indiana Virtual Pathways Academy inflated their enrollment with thousands of “ghost students” — including, prosecutors say, one child enrolled after death — to draw down $44 million in state funding they weren’t entitled to. The scheme unfolded under Indiana’s Republican state government, Govs. Mike Pence (R) and Eric Holcomb (R), though Indiana’s elected state schools chief was Glenda Ritz (D) until January 2017, succeeded by Jennifer McCormick (R).
Superintendent Percy Clark, 82, pleaded guilty on May 27, 2025, and was sentenced to five years of probation, including two years of home confinement, and held jointly liable for $44.6 million in restitution. Founder Thomas Stoughton and director Phillip Holden were indicted in January 2024 and have not been convicted; both declined plea deals, and their trial is scheduled for July 28, 2026 — after this story publishes. Holden’s attorney says he is innocent. Both men are presumed innocent unless and until a jury says otherwise.
WFYI, Indianapolis’s public broadcaster, has reported that Indiana paid the two virtual schools roughly $154 million in total funding — not the amount authorities allege was fraudulent. The Open the Books/SFOF report and the federal indictment both put the fraudulent or excess portion at $44 million, with $44.6 million in restitution jointly assigned to convicted and indicted defendants. The two figures measure different things and should not be conflated.
In Democratic-run Houston, former Houston Independent School District chief operating officer Brian Busby and contractor Anthony Hutchison ran a nine-year scheme steering maintenance contracts in exchange for bribes; a federal raid on the operation turned up $186,000 in cash. In April 2025, a federal jury convicted Busby on all 33 counts — conspiracy, bribery, false tax returns, and witness tampering — and Hutchison on those same counts plus seven wire fraud charges. Texas’s Republican state government, under Gov. Greg Abbott (R), took control of the HISD school board in 2023 — years after this scheme, and for separate, unrelated governance failures, not this case.
The report’s most consequential finding is structural, not any single case. Of the 20 largest federally funded school districts in the country, only three — Broward County, Florida; Houston ISD; and Chicago Public Schools, under Mayor Brandon Johnson (D) and Gov. JB Pritzker (D) — have ever turned up in an OIG fraud probe. In Broward, former information officer Anthony Hunter was indicted in 2021 over $17 million in allegedly steered contracts; the charges were dismissed in 2024 on jurisdictional grounds, without a ruling on the underlying merits. Chicago Public Schools misclassified more than 1,000 students to draw $1 million in Indian Education grant funds from 2016 to 2023; no criminal charges were filed, and CPS is repaying the $1 million and skipping its FY26 grant. The other 17 of the largest 20 districts have never appeared in an OIG fraud probe at all — meaning the true national toll is almost certainly larger than $225 million.
Education Secretary Linda McMahon (R), who serves on Vice President JD Vance’s (R) Task Force to Eliminate Fraud, called the pattern deliberate in a Fox Business interview: “Fraudsters are seemingly trying to pick the pocket of American taxpayers everywhere we turn,” she said, adding, “We’re just beginning now to really look into the fraud in the K-12 schools.” The department says its broader fraud-recovery push has saved roughly $2 billion to date.
Nearly 90 confirmed K-12 fraud cases, $225 million taken, only 30 percent recovered — and the government has audited fraud at just three of the nation’s 20 largest school districts. The cases span both parties’ jurisdictions: Indiana’s $44 million ghost-student scheme unfolded under Republican state government, while the report’s literal headline hook, a charter-school director’s Disney cruises, played out in Democratic-run Los Angeles County, alongside Houston and Chicago. Secretary McMahon says the federal government is “just beginning” to look. Seventeen of the largest districts in America have never been checked at all.
