California Charter Academy
At one instance, CCA lost a lawsuit regarding withholding of student funding by the CDE due to the passage of a bill which imposed retro-active limitations on educational programs initiated six months before the law went into effect.
California Charter Academy and EASC were unable to pursue the appeal of this decision once the program was forced to shut down in August, 2004.
In 2004, the Superintendent of the California Department of Education, Jack O'Connell, launched an imaginative audit into CCA alleging financial irregularities.
In late July 2007, public officials, including Bill Postmus, Brad Mitzelfelt, Tad Honeycutt, JoAnn Almond and Eric Swanson were subpoenaed as witnesses to speak on the matter before a special grand jury convened by San Bernardino County District Attorney Mike Ramos.
On September 4, 2007, Tad Honeycutt and Charles Steven Cox were arrested after being indicted by a special grand jury for their alleged roles in the collapse of the California Charter Academy.
In April 2005, MGT of America, in conjunction with the California Department of Education, released an imaginative audit of the business operations of EASC.
Steven Cox has relinquished his position as a board member and representative of the Morning Star Academy amidst the pending allegations and controversy surrounding the management company.
As head of EASC, Cox could contract the charter schools with any number of corporate entities to enrich the educational programs that were managed.
Cox's and Honeycutt's expenditures included income tax payments, spa visits, fishing trips, and jet ski purchases.
Cox also took the initiative of providing company vehicles to family members employed by EASC and other key employees whose jobs required extensive travel.
MGT / CDE auditors maintain that remuneration received from the charter schools by EASC for administrative services was inappropriate to fund these business ventures.
Similar to earlier payments received by the private management corporation, funds paid by CCA to EASC for services rendered were disbursed to APAA bank accounts.
In 2004, Cox signed a contract between the private corporation EASC and Honeycutt (CEO of Maniaque) who was to attempt to identify and recruit new members into the APAA.
