Federal agents raid office of LA-based 'Celerity' charter school network

Federal agents raided the offices of Celerity Educational Group — a Los Angeles-based organization that runs a network of charter schools both in Southern California and Louisiana — on Wednesday, KPCC has confirmed.

Officials with the U.S. Department of Education, the FBI and the U.S. Attorney's office in L.A. were involved in the raid, which was first reported by The Los Angeles Times. The Times also reported a U.S. Department of Homeland Security spokesman confirmed his agency's involvement in the raid.

"Celerity has been informed of this investigation and looks forward to cooperatively addressing any concerns raised by the investigating agencies," said Stefan Friedman, a Celerity spokesman, in a prepared statement. "Regardless, Celerity will continue to pursue the high educational standards of which it has always been proud."

The warrants for the raid are under seal, meaning federal officials have not explicitly informed Celerity representatives of the nature of the allegations they're investigating.

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L.A. Unified School District officials, who currently oversee six of the seven California schools in Celerity's network, have recently raised concerns about ties between Celerity Educational Group; its former CEO, Vielka McFarlane; and a related entity: Celerity Global Development.

According to district documents, in 2012, the governing board for Celerity Educational Group handed over perhaps as much as $2.3 million in cash reserves over to Celerity Global, along with "day-to-day management" of the schools and effective control over the Educational Group's board. After the changes, district officials said it was no longer clear which charter schools employees actually worked for Celerity Global and which worked for Celerity Educational Group.

"As a result of these changes … Global is the organization that actually manages the charter school," L.A. Unified charter officials wrote last October — but, district officials said, Celerity never informed the district of the changes. When L.A. Unified officials requested what they believed to be "basic information" about the governance arrangements, it found the school's responses to be insufficient.

Among the things L.A. Unified officials said Celerity leaders couldn't adequately explain: checks totaling $5.6 million dollars written from Celerity Educational Group to Celerity Global and other entities with similar names.

McFarlane, who founded the network, is one link between Celerity Global and Celerity Educational Group. Tax forms from both organizations list her name — and district officials raised concerns her involvement in both organizations could raise potential conflicts of interest.

Though McFarlane has "removed herself from positions within [Celerity Educational Group]," district officials wrote, "checks were identified with her as an authorized signatory which suggests that she continues to be involved with the fiscal operations of the Celerity schools."

The district also flagged transfers of funds between Celerity's L.A.-area campuses, Celerity Educational Group, Celerity Global and yet another related entity, Celerity Development, LLC. District officials said neither Celerity Global nor Celerity Development, LLC, have disclosed their "financials" since Fiscal Year 2011-12.

"When Petitioner [Celerity Educational Group] refuses to provide basic information about the affiliated entity," officials in L.A. Unified's Charter Schools Division concluded last October, "it precludes a full assessment of whether conflicts of interests [sic] exist and calls into serious question the practices of the organizations."

As a result of these concerns, district officials recommended in October the L.A. Unified board decline to renew the charters for two Celerity schools — the Dyad campus in South L.A. and the Troika campus in Eagle Rock. Board members agreed by a 6-0 vote.

Charter schools receive public funding, but are operated by independent groups — non-profit organizations, mostly — not school districts. The charter group must apply to an "authorizer" — a local school district, county Office of Education or the State Board of Education — for permission to open. In exchange for freedom from some state public school regulations, the schools must apply to their authorizer every few years to renew their charters in order to remain open.

The Compton Unified School District oversees a seventh Celerity school. Celerity Educational Group is also linked with four charter schools in Louisiana.