State remains silent on prosecution of millions in alleged virtual school fraud scheme

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LIMESTONE COUNTY, Alabama – The News 19 investigative team continues to investigate how a group of educators and administrators were indicted in an alleged scheme to defraud both US governments and states.

Former Athens City Schools Superintendent Trey Holladay and Former Limestone County Schools Superintendent Tom Sisk are 2 of 6 named in the indictment. Investigators accuse the group of executing a multi-million dollar virtual school fraud scheme.

The indictment alleges that Holladay called numerous shots.

Federal investigators say the scheme was about the money. The indictment says former Athens city school superintendent Trey Holladay has found a way to inflate enrollment at virtual academies.

Then, state funding for students was channeled to the school districts of Athens City, Limestone and Conecuh County.

The indictment says the virtual programs were operated by schools in the city of Athens and Limestone County.
But many of the students were actually full-time students in private schools, mostly from the state’s black belt.

We asked the State Board of Education when they were first informed that something might be wrong. We did not have a clear answer.

“Several months ago the United States Inspector General’s office came to sit with me, based on some things the department was able to share with them,” State Superintendent Eric said. Mackey, “We’ve given them all the information they have.” I asked, and it’s been a while, but I can’t give an exact date when the investigation started because they told us. asked not to go in there.

Ultimately, investigators claim the program led to the fraud of millions of dollars in state-approved funding.

The indictment says the state has questioned many things that happen in virtual academies as early as 2016.

Federal officials say Holladay lied and asked a co-accused in the case to falsify course reports to say that the full-time private students were full-time virtual students.

The indictment also alleges that parents of private school students did not initially sign permission forms to enroll their students in virtual academies. Instead, Holladay is accused of telling principals they can grant permission on behalf of students.

The indictment later alleges that Holladay and his co-defendants agreed to pay the principals for each consent form signed by real parents.

We asked Mackey if people should be concerned about the operations of virtual schools or the state’s ability to oversee them. He said the arrests showed the surveillance system was working.

But concerning the millions of taxpayer dollars funneled to the parties by an alleged fraud scheme. Mackey wouldn’t say if the state is considering getting the money back.


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Perry A. Thomasson