Bankruptcy papers raise issue of where scholarship funds went
The law says $400,000 collected by a nonprofit foundation was to be used to educate poor children. But some may have gone for other uses at a strapped private school.
By Associated Press
Published September 26, 2003
TALLAHASSEE - Federal bankruptcy court documents show the link between a private school and an Ocala foundation under investigation for its use of $400,000 that was supposed to go to educate poor children, a newspaper reported Thursday.
James K. Isenhour is the chief financial officer of Cambridge Academy, a for-profit "distance learning" school in an Ocala strip mall.
He is also the head of Silver Archer, a nonprofit foundation that is supposed to give scholarships to poor children under a state law that gives businesses a tax break for funding the scholarships.
Silver Archer collected more than $400,000, but state officials say they don't know if the money ever was used as intended.
The Department of Financial Services is investigating the use of the money, assisted by the Florida Department of Law Enforcement. After an internal investigation, the state Department of Education has referred the matter to FDLE for handling.
Cambridge Academy, which sought bankruptcy protection in March, failed to submit payroll taxes for more than a year, the Palm Beach Post reported Thursday.
But Isenhour still asked for permission to pay himself $1,000 a week. He told the bankruptcy judge he could afford a pay raise because Cambridge Academy had found a new source of revenue: the corporate tax credit program.
After reviewing the books, U.S. Bankruptcy Judge Jerry Funk agreed on July 31 to the salary request.
Federal court papers list Isenhour as chief financial officer of Cambridge Academy and his daughter, Taylar Butler, as owner and chief executive officer. But all court filings were handled by Isenhour, who was open about the links between Cambridge Academy and Silver Archer.
In a court filing on May 5, Isenhour's lawyer, Robert Altman, said Cambridge Academy expected an influx of state dollars over the summer.
In the school's monthly financial filing to the court, Isenhour and Altman wrote that the Cambridge Academy began receiving money from the Silver Archer Foundation in May.
"We believe that starting with the last quarter of 2003, the foundation will increase funding substantially," the two wrote.
Cambridge Academy had assets of $12,000 and total liabilities of more than $577,000 when it filed for bankruptcy protection in March. Most of its debt was back taxes owed the federal government.
Isenhour did not return a phone call for comment Thursday.