California Reaches Settlement With K12 Inc Over Fraudulent Claims, K12 Inc Responds
Jul 11, 2016
TARNISHING THE GOLDEN STATE: California Attorney General Kamala Harris announced on July 8 that her office had reached a $168.5 million settlement as a result of its investigation into K12 Inc and its affiliate, California Virtual Schools (CAVA). K12 Inc, a for-profit online charter school operator, and CAVA, a collective of nonprofit online charter schools serving 13,000 California students, will forgive $160 million in debt, pay $6 million to cover the costs of the investigation and pay $2.5 million in response to several private lawsuits.
The Bureau of Children’s Justice and False Claims within the California Justice Department alleged that K12 Inc and CAVA presented false and misleading statements about class sizes, fees and students’ progress. K12 and CAVA will also be subject to contract reform and independent reviews.
K12 Inc has responded to the Attorney General’s statements by saying that it has neither admitted nor committed wrongdoing. The company said Harris’ settlement figures were incorrect and emphasized that it would only be paying $2.5 million to settle cases. K12 Inc CEO Stuart Udell told the Wall Street Journal that Harris “grossly mischaracterized the value of the settlement, just as her office did with regard to the issues it investigated.”