Indiana Virtual School
Outcome
Three officials of Indiana Virtual School and Indiana Virtual Pathways Academy were indicted for a $44.6 million scheme to inflate student enrollment numbers to fraudulently obtain state education funding; one defendant pleaded guilty and agreed to pay $44.6 million restitution.
Details
Indiana Virtual School / Indiana Virtual Pathways Academy — $44.6 Million Enrollment Fraud (2016–2018)
Outcome: Officials at Indiana Virtual School and Indiana Virtual Pathways Academy were indicted for submitting false enrollment numbers to the Indiana Department of Education in a scheme prosecutors describe as one of the largest public education fraud cases in Indiana history; the schools closed abruptly in 2019 and defendants face charges totaling $44.6 million in alleged fraud.
Indiana Virtual School (IVS) and Indiana Virtual Pathways Academy (IVPA) were two online charter schools operating in Indiana. The schools received state funding on a per-pupil basis: the more students enrolled and attending, the more funding the schools received from the Indiana Department of Education.
According to the federal indictment returned in January 2024, between at least the summer of 2016 and 2018, the defendants allegedly submitted false enrollment figures to the IDOE representing that over 4,500 students were enrolled and attending the schools — students who were not, in fact, attending. By inflating enrollment with phantom students, the schools improperly received tens of millions of dollars in state education funding.
Both schools closed abruptly in 2019 following public disclosure of the enrollment allegations. A federal investigation by the U.S. Attorney's Office for the Southern District of Indiana and the FBI subsequently resulted in charges against three defendants in January 2024. Percy Clark, 82, of Carmel, agreed to plead guilty to wire fraud conspiracy in June 2025. Clark's plea agreement provides for five years of probation and joint responsibility for $44.6 million in restitution, though he will avoid prison due to his age and other factors.
Primary Source: DOJ USAO-SDIN — Four Individuals Charged in $44.6 Million Scheme to Defraud Indiana Department of Education
How Crucible Prevents This
Student enrollment verification controls requiring schools to independently corroborate attendance data against activity logs, logins, or submitted work would have caught the pattern of over 4,500 non-attending students being counted for funding. State-level reconciliation audits comparing claimed enrollment numbers to learning management system activity data would have surfaced the discrepancy. Indiana's per-pupil funding formula created a structural incentive to inflate counts — compliance controls requiring third-party attestation of enrollment numbers would have mitigated that risk.
Don't let this happen to your organization. See how Crucible works.
See How Crucible Works