June 6, 2025 | JacobiJournal.com – Ex-Pasadena Schools Superintendent Percy Clark has agreed to plead guilty to charges connected with a massive fraud scheme that drained millions from Indiana’s education system. Specifically, the fraud involved inflating enrollment numbers at Indiana Virtual School (IVS) and Indiana Virtual Pathways Academy (IVPA), leading to millions of dollars in illegitimate state funding and taxpayer losses.
This scheme, which was active between 2016 and 2018, manipulated attendance records by reactivating inactive students and falsely reporting attendance. As a result, the schools were able to claim excessive funding from the state unlawfully.
A Coordinated Fraud Ring
Clark, alongside other defendants including Christopher King and Thomas Stoughton Sr., founder of the virtual schools, allegedly conspired to funnel state education funds through a complex web of for-profit companies. Moreover, the investigation uncovered a well-orchestrated scheme designed to conceal fraudulent billing and maximize illegal payouts.
Federal charges include conspiracy to commit wire fraud, multiple counts of wire fraud, and money laundering. Collectively, these charges reflect the severity and scale of the scheme that ultimately cost taxpayers millions.
The Impact and Legal Repercussions
The case, triggered by a 2019 state audit, prompted multi-agency investigations involving the FBI and the Department of Education’s Office of Inspector General. Clark’s pending guilty plea marks a significant step toward accountability in education funding fraud.
Beyond criminal prosecution, the Indiana Attorney General has also filed a civil suit aiming to recover over $150 million in misappropriated funds, thereby underscoring the lasting financial impact of such schemes.
Why This Case Matters
This fraud highlights vulnerabilities in virtual education funding models and the need for heightened oversight and transparency. Therefore, this serves as a critical reminder to investigators, educators, and policymakers about the risks of unchecked enrollment reporting.