Another Charter School Funded by EB-5 Collapses

By David North on July 29, 2019

Another charter school funded by immigrant investors in the EB-5 program has collapsed amidst charges of financial chicanery.

We have previously suggested that these two lightly regulated programs are each dangerous in their own ways, but the combination is potentially lethal.

The EB-5 program, in effect, sells green cards to wealthy aliens in return for investments in government-designated but not guaranteed projects; charter schools use public school moneys to provide education via private entities.

According to a report from KUTV in Salt Lake City, the American International School of Utah, which was once funded with $5 million in EB-5 investments, has closed its doors and has fired its executive director, Mike Farley. The station reported:

Although the scarlet letter hung over the school, many charter school watchers thought AISU was turning the corner and might soon be financially viable. Then in April, the bottom fell out for AISU.

An audit revealed that the school had misspent nearly $500,000 in federal and state special education money. The two entities were demanding their money back, and AISU officials, who felt they would never come up with that money, voted to shut down the school instead.

"Special education" usually means services to the disabled, so the victims in this case may well be not only the usual mix of taxpayers and foreign investors, but some special needs kids as well.

The report also said that the investors had neither gotten their money back nor received the visas; this is not an unusual end to these stories.