FBI seizes records of N. Phila. charter school

Federal agents yesterday seized financial records from a North Philadelphia school, another move in a widening federal probe of area charter schools.

Michael Mustokoff, an attorney for the Community Academy of Philadelphia Charter School, confirmed that FBI agents retrieved the records yesterday morning.

In a statement, Mustokoff said the Philadelphia School District informed school officials two weeks ago that it would pick up financial records for review. School officials readied those records, Mustokoff said.

"We were surprised by the unnecessary appearance of FBI agents to retrieve those same records that were awaiting inspection," Mustokoff said in the statement. "We expect to cooperate with the authorities and to be exonerated of any potential allegations of wrongdoing."

Mustokoff and school officials declined to comment further.

An FBI spokesman said he could neither confirm nor deny that the school was under investigation. A school district spokesman said last night he could not confirm whether district officials had asked for the records.

Charters are public schools run by independent boards, but the districts that grant the charters have some oversight powers, especially when a school's five-year charter is up for renewal.

Community Academy, which opened in 1980 as a private school, became a charter in 1997. It is housed in an old cheese factory at J Street and Erie Avenue. Its five-year charter expires in 2011.

The school, one of 67 charters in Philadelphia, serves 1,200 students in kindergarten through 12th grades. The school failed to meet state standards in 2007 and 2008.

In 2007, it received $9.4 million from the Philadelphia School District. The school reported revenue of $12 million for the year ending June 30, 2007, in its 2006 federal tax return, the most recent available last night.

The school was founded by Joseph Proietta. It moved to Juniata Park in 1981, and for many years served at-risk youth, dropouts, and teen parents referred by the district.

The school has an award-winning chess team, and college prep and remedial classes. It has a day-care center, a teen clinic, and a full range of emotional support services, according to its Web site.

At least five Philadelphia-area charter schools are under investigation, their control of public funds and management oversight called into question. Federal authorities are adding resources to the probe.

People familiar with the matter say the list includes New Media Technology Charter School, with campuses in Germantown and Stenton; Germantown Settlement Charter School in Germantown; Northwood Academy in the Northeast; and Agora Cyber Charter School in Devon, which provides online instruction to 4,400 students statewide.

The probe began at Philadelphia Academy Charter School in the Northeast. It started after The Inquirer reported in April 2008 that the school district's inspector general was investigating allegations of financial mismanagement, nepotism, and conflicts of interest at the school.

Former Philadelphia Academy chief executive officer Kevin O'Shea and former board president Rosemary DiLacqua have pleaded guilty to fraud charges and await sentencing in October. The school's founder, Brien Gardiner, committed suicide in May amid reports that indictments were imminent.

The expanding federal investigation has forced the Philadelphia School Reform Commission and the state Department of Education to take a closer look at charters.