He reported the fraud. They fired him. It was $69 million.

For years, Indiana paid two virtual charter schools for students who weren't attending -- including, in one case⧉, a student who had died and was counted again the following year.▸ A state audit found $68.98 million in overpayments and irregularities. An employee who tried to report the fraud in 2017 was fired for it.

Indiana's State Board of Accounts⧉ investigated Indiana Virtual School (IVS) and Indiana Virtual Pathways Academy (IVPA) for the eight years from July 2011 through June 2019, and states two separate headline findings: more than $68.7 million taken in based on misrepresented enrollment, and a further $85.76 million paid to vendors with no or insufficient invoices.▸ Auditors found the schools enrolled and kept enrolling students who had never expressed interest, had moved out of state, or had aged out of eligibility -- and in one case, failed to remove a student who had died before one year's enrollment count, then counted that same deceased student again the next year. The audit's own conclusion: the pattern shows 'a substantial disregard for compliance obligations,' consistent with officials 'focused on maximizing profits and revenues by exploiting perceived vulnerabilities' in state oversight.

The audit found the schools' boards had 'no meaningful oversight' of operations -- no documentation they ever approved a disbursement -- while Thomas Stoughton served simultaneously as board president and chief executive, letting him sign contracts with and write checks to related-party vendors unchecked.▸ Examiners also found two blank checks signed by a board officer, Fred W. Ellis, who had already died. Within the audit's separate $85.76 million vendor-disbursement finding⧉, examples include $18.3 million paid to one vendor with no invoices at all, and $14.4 million to another with almost none -- a vendor that turned out to be owned by the father of the schools' own CFO.

The Justice Department's 2024 indictment⧉ describes a narrower, later slice of this record: between 2016 and 2018, the schools' leaders allegedly submitted false enrollment numbers for more than 4,500 students who weren't attending, netting more than $44 million from the state.▸ In spring 2017 -- in the middle of that scheme -- two of the defendants fired an employee who had emailed the state education department to report the fraud. Christopher King pleaded guilty before the others were even charged. Percy Clark has since pleaded guilty too⧉ and been sentenced to five years of probation -- no prison time -- while jointly owing $44.6 million in restitution. Stoughton and Holden go to trial July 28, 2026⧉, a date already delayed three times; Holden's attorney says: 'My client Mr. Holden is innocent.'

Indiana separately sued Stoughton, his wife Rhonda, and others in 2021, seeking $154 million -- a figure that roughly matches the audit's two headline findings added together⧉.▸ Collecting it looks doubtful: by late 2024, Stoughton had no attorney in the federal case after his prior lawyer withdrew over unpaid bills, the Stoughtons had lost a $2.6 million Florida condo to foreclosure, and they were more than $18,000 behind on their Indiana property taxes.