The former principal of the shuttered Discovery Creemos Academy pleaded guilty Friday to participating in a $2.5 million scheme to inflate enrollment at the defunct charter school.

Harold Cadiz, 55, faces up to 12 ½ years in prison after pleading guilty in Maricopa County Superior Court to two counts of felony theft during the 2016-17 and 2017-18 school years. He’s scheduled to be sentenced March 27.

Cadiz is the second administrator from the Goodyear charter school, also known as the Bradley Academy of Excellence, to admit to participating in the scheme to defraud the state and federal governments by inflating the school’s enrollment by hundreds of students.

Cadiz’s plea calls for a prison sentence of 3 to 12 ½ years and up to 7 years of probation.

Arizona public schools are funded based on the number of students, meaning each additional student a school reports to the state brings more tax dollars.

Daniel K. Hughes, president and CEO of Discovery Creemos, was the first executive at the school to cut a plea bargain with the Arizona Attorney General’s Office, admitting to theft and conspiracy in November 2018. He faces a presumptive prison sentence of five years.

The school closed January 2018, just after the 100th day of the school year, ensuring it would receive as much state money as possible before it closed.

A few months before Discovery Creemos Academy closed, Hughes had assured the Charter Board that he would turn around the financially and academically failing charter school. Reviews by the Charter Board for the 2013-14, 2014-15 and 2015-16 school years found the school did not meet its financial performance recommendations.

Hughes has admitted that during the 2017-18 school year, his school reported an enrollment of 528 students, but 453 of them were fraudulent. In 2016-17, the school reported it had 652 students, but 191 were fraudulent.

A third defendant, Joann Riojas Vega, was indicted in January 2019 with Cadiz.

The state Charter Board, tasked with regulating Arizona’s more than 500 charter schools, doesn’t have the staff to visit most charter campuses to confirm self-reported enrollment figures, opening the door to what occurred at Discovery Creemos. 

The Attorney General’s Office alleges that as school registrar, Vega conspired with Hughes and Cadiz to over-report to the Arizona Department of Education the number of students enrolled.Vega’s case is pending. 

Prior to entering guilty pleas, Cadiz blamed Hughes for the theft.

“I got caught up in stuff that is not me, and I’m facing years in prison because of his greed,” Cadiz said in an interview with The Arizona Republic. “I’m beside myself. I live in torment.”

Cadiz’s conviction is the latest victory in Attorney General Mark Brnovich’s effort to crack down on Arizona charter schools that misuse public funds. 

In July, Brnovich reached a settlement with the operators of San Tan Montessori School Inc., which operates two charter-school campuses in Gilbert, to repay the state $180,000 after using those funds on tickets to professional sporting events and other personal expenses.

Brnovich has called on the Republican-controlled Legislature and Ducey to pass laws that would provide more oversight of Arizona’s charter schools and to give his office more authority to investigate civil cases.

However, the Legislature and Gov. Doug Ducey have largely rejected efforts for strict reform and more oversight of charter schools. 

Have a tip on charter schools or other investigative stories? Reach the reporter at [email protected] or 602-444-8478 or on Twitter @charrisazrep. 

Support local journalism. Subscribe to azcentral.com today.

Read or Share this story: https://www.azcentral.com/story/news/local/arizona-education/2020/02/14/discovery-creemos-academy-principal-harold-cadiz-pleads-guilty-fraud/4761062002/