Tuesday, June 15, 2010

CHARTER SCHOOL LEADERS CHARGED WITH STEALING OVER $200,000 IN PUBLIC FUNDS: The Russian couple faces 38 felony and misdemeanor counts for alleged actions in their operation of Ivy Academia.

By Howard Blume, Los Angeles Times

June 12, 2010 -- The leaders of a high-performing San Fernando Valley charter school were charged this week with stealing more than $200,000 in public funds through embezzlement, money laundering and filing false tax returns, among other alleged crimes.

Eugene Selivanov, 38, and his wife, Tatyana Berkovich, 33, have denied any wrongdoing, according to their attorney.

An arraignment scheduled for Friday in Los Angeles County Superior Court was postponed until next month.

The couple faces 38 felony and misdemeanor counts for alleged actions from 2004 through 2009 in their operation of Ivy Academia, a charter school with test scores that place it in the state's top 30% of schools.

The legal troubles are the latest twist in the saga of two Russian immigrants who combined their passions for education and business with their charter school of 1,100 students.

Charters — public schools that are independently managed— allowed the couple to pursue their idiosyncratic vision. Students begin learning business principles in kindergarten and develop business plans in 6th grade. All grade levels participate regularly in a mock society that includes merchants and government agencies and the exchange of school currency for services and wages.

The couple has acknowledged that in the early days of the school, they mixed public funds from the nonprofit charter with money and accounts attached to earlier for-profit enterprises they operated: a preschool and a summer camp/school.

The practice attracted criticism from the Inspector General of the Los Angeles Unified School District, who conducted a 2007 audit of Ivy Academia. Selivanov, "through online banking access, transferred funds to and from the charter school and other affiliated entities," the audit said. "Most of these transfers were not recorded in the books of the charter school."

Details of the criminal case prepared by the district attorney's Public Integrity Division have yet to emerge, but it grew out of issues flagged in the audit, district officials said Friday.

A spokesman added that the district, which oversees the school, would take "swift and appropriate action as necessary."

If convicted on all charges, Selivanov's maximum sentence would be 14 years and two months in state prison, according to the district attorney's office. His wife faces a maximum nine-year sentence.

Much of the case will center on how charter schools can operate, said defense attorney Janet I. Levine.

Charters and traditional schools "don't operate with the same exact set of bureaucratic rules," she noted.

Was it proper, for example, to allow their private preschool to operate rent-free on a campus leased with public funds?

In interviews before the charges were filed, Selivanov and Berkovich insisted they did not enrich themselves with the financial transfers. Nor did they misuse public funds, they said. They also told the district that they would adjust bookkeeping practices per L.A. Unified's standards after the audit.

Since its inception, the school attracted notice. It began classes in hotel rooms because it lacked a facility. Still lacking a large-enough site, the school uses classrooms at locations in Woodland Hills, West Hills, Winnetka and Chatsworth.

At one point, the state was poised to let the school apply for $40 million in funds to rehabilitate a closed district campus for its use. But the application fell through when L.A. Unified failed to endorse it in time. Insiders suggest that the cloud of the investigation accounted for some of the district's foot-dragging.

Especially in its early years, Ivy Academia generated a trail of critics among residential neighbors and some former parents and employees, who questioned the couple's forthrightness and practices.

The school's defenders point to a 2,000-student waiting list.

"Part of the reason the school is successful is the positive attitude of Eugene and Tatyana," said parent Laurie Albert. "It trickles down to the teachers and the students. Tatyana always has a smile on her face."

An unsigned letter sent home to parents said the school would continue to operate normally.

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