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UNO charged with defrauding investors

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The Securities and Exchange Commission on Monday announced it had charged charter school operator UNO with defrauding investors in a $37.5 million bond offering for school construction work by failing to disclose conflicts of interest.

The SEC alleged that UNO Charter School Network had failed to disclose a multimillion dollar contract with a windows company linked to one of its top executives, Miguel d’Escoto.

D’Escoto, resigned in February last year, days after the Sun-Times reported that UNO gave $8.5 million of business to companies owned by two of d’Escoto’s brothers with money from $98 million in state school-construction grant funding.

posted by Rich Miller
Monday, Jun 2, 14 @ 11:23 am

Comments

Any comment from the campaign of the charter school champion Bruce Rauner?

– MrJM

Comment by MrJM (@MisterJayEm) Monday, Jun 2, 14 @ 11:30 am
You mean the Bruce Rauner who gave $800,000 to UNO, which used part of the money to pay bills when its state funding was suspended due to this investigation:
http://www.suntimes.com/news/watchdogs/25257840-452/gop-candidate-bruce-rauners-money-helped-uno-pay-bills.html

Comment by Reality Check Monday, Jun 2, 14 @ 11:37 am
UNO has the biggest charter school network in the state. Rauner is the state’s most prominent advocate of expanding charter schools. Consequently, one might think he would have an opinion. But then one might think after 15 months of campaigning that he’d have a budget proposal by now too.

Comment by Anon Monday, Jun 2, 14 @ 11:37 am
But, but, but . . .

They only did it for the kids!

Comment by Bill White Monday, Jun 2, 14 @ 11:38 am
Yeah, but they defrauded investors and lined their pockets with taxpayer dollars for the children.

So let’s continue expanding charter schools.

Comment by wordslinger Monday, Jun 2, 14 @ 11:40 am
Ruh Roh

Comment by Bring Back Boone's Monday, Jun 2, 14 @ 11:47 am
Like all his other business ventures — and, essentially, everything he’s involved in — he was not aware of any issues. I mean, how could he, right? In this case, his “family charity” simply gave the money and, of course — of course! — didn’t specify how it was to be spent.

Stay classy, bro!

Comment by Frenchie Mendoza Monday, Jun 2, 14 @ 12:02 pm
Multiple choice, is Rauner? :

A.) Innocent Bystander

B.) Un-Indicted Co-Conspirator

C.) Soon to be Indicted Co- Conspirator

D.) Soon to be Next Governor

E.) Other:______________

Comment by x ace Monday, Jun 2, 14 @ 12:02 pm
Funny what happens when you run schools without the overly burdensome government to get in the way with its bureaucracy and oversight.

At one point I was a supporter of charter schools because they seemed to work really well. Once you dig deeper, though, a lot of these schools do well at the disadvantage of the poorest and special-needs students. And a lot of them don’t perform any better.

Either way, lining your pockets with taxpayer money earmarked for children’s education should be criminal. I hope they take this guy down.

Comment by Bunson8r Monday, Jun 2, 14 @ 12:08 pm
From the SEC press release.

“According to the SEC’s complaint filed in federal court in Chicago, UNO entered into two grant agreements with the Illinois Department of Commerce and Economic Opportunity (IDCEO) in 2010 and 2011 to build three schools. Each grant agreement contained a provision requiring UNO to certify that no conflict of interest existed when it signed the agreements. UNO was required to immediately notify IDCEO in writing if any actual or potential conflicts subsequently arose. If UNO breached this conflict of interest provision, IDCEO could suspend the payment of grants and recover grant funds already paid to UNO.”

Comment by Bigtwich Monday, Jun 2, 14 @ 12:12 pm
This is a much bigger deal for Rahm (and possibly Quinn, though it doesn’t look like it will be right now) than Rauner.

Comment by From the 'Dale to HP Monday, Jun 2, 14 @ 12:36 pm
Hardly surprising.

Comment by The Prince Monday, Jun 2, 14 @ 12:42 pm
@ x ace 12:02 — “Multiple choice, is Rauner? : …”

E. All of above.

Only in Illinois could this be possible.

Comment by olddog Monday, Jun 2, 14 @ 1:04 pm
Sad. The charter school efforts in this state should all be inspected for such deals going on. There is money to be made on the backs of children who deserve so much more. Greed hurts.

Comment by Nearly Normal Monday, Jun 2, 14 @ 2:18 pm
As noted last week in the comments, charter schools started off as a way to keep our kids separate from their kids. But it has grown way beyond that into a huge money making shakedown operation, where government funds go to enrich private businesses with very little oversight.

They haven’t done much to the big banks on Wall Street lately, but hurrah to the SEC for finally investigating somebody.

Comment by DuPage Dave Monday, Jun 2, 14 @ 3:12 pm
–They haven’t done much to the big banks on Wall Street lately, but hurrah to the SEC for finally investigating somebody.–

Same crew, what with the tax breaks, testing products, contracts, etc.

Comment by wordslinger Monday, Jun 2, 14 @ 3:27 pm
@ MrJM -

“Any comment from the campaign of the charter school champion Bruce Rauner?”

No, this is a social issue, and Rauner doesn’t have opinions on social issues.

Comment by Joan P. Monday, Jun 2, 14 @ 3:58 pm
Wait, isn’t Rangel the same guy that UNO co-Hort , former central committee member and Chicago YR president Angel Garcia selected to speak at their June 9th business meeting? That is until the times exposed them? Great judgement!
http://www.suntimes.com/news/sneed/27425615-452/sneed-ex-uno-chief-juan-rangel-eyes-gop.html#.U41rX4m9LCQ

Comment by Hon IG Tuesday, Jun 3, 14 @ 1:58 am
Love how the tin foil caps come out on this one. This is one charter school network, making this about ALL charter schools is so rabidly off base. Take off your CTU name badges and listen up- Madigan had his hands deep in this one. Follow the bond money trail and you will see. This CEO was a piece of work and used all the great skills taught to him by the great Obi Wan- Dick Daley and Sith lord Madigoon. He just got caught when his ego got the best of him. Find it ironic that in the end UNO means ONE and this all will come down to ONE guy- Rangel and the puppet masters will skate clean.

Comment by Statesman Tuesday, Jun 3, 14 @ 11:44 am
Hon IG- There have been alot of stirrings about the UNO CEO jumping ship to the GOP. With his buddy Rahm and Rauner being so interconnected, there is no time better than the present. Illinois is the land of opportunity for many of these types. Shut down shop at one location and open up under another. With little Bag handlers like some of these Baby-GOP wannabes (Garcia etc) it is all to easy.

Comment by Boondoggling Tuesday, Jun 3, 14 @ 2:35 pm
Pre-requisite events are also quite helpful in this regard.
As technology progresses, cab companies continue to do all they can to keep up
and to incorporate new equipment into their vehicles.

When it recognized a pattern, a meaning was assigned.

Comment by Dillon Thursday, Jun 12, 14 @ 6:13 am