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INDIANAPOLIS — A federal grand jury has indicted three individuals for their roles in a conspiracy to defraud the Indiana Department of Education. The scheme involved two online charter schools, Indiana Virtual School (IVS) and Indiana Virtual Pathways Academy (IVPA).

A fourth individual, Christopher King, 61 of Green Fork has already entered a guilty plea in regards to the charges.

The charges include conspiracy to commit wire fraud, wire fraud, and money laundering. Two defendants are from Carmel, Tom Stoughton Sr, 74 and Percy Clark, 81. The third is Phillip Holden, 62 of Middletown.

The indictment states that between the summer of 2016 and 2018 the defendants submitted false numbers to the IDOE stating they had an enrollment of 4,500 students, which they knew were not actually attending IVS or IVPA.

During that time IVS and IVPA received funding from the state of Indiana based on the number of students enrolled in the school. Generally, schools with higher attendance and enrollment receive more funding.

The indictment says that the defendants manipulated their enrollment numbers leading to them receiving an excess of $44,000,000. It claims that the process for faking enrollment numbers involved used incomplete student applications that were submitted previously as well as a list of approximately 600 students who had been un-enrolled due to inactivity.

In the spring of 2017 Holden and Clark allegedly fired an employee who sent an email to IDOE informing them of the fraud occurring at IVS.

A trial date for the three individuals who have yet to enter a plea is still being scheduled. If convicted their time in federal prison could range from 10 to 20 years.