OAKLAND -- The FBI and IRS have opened a criminal investigation into a charter school whose former director allegedly funneled $3.8 million from the school to companies he owns for construction and classroom rental spaces.
On Wednesday afternoon, the federal agencies executed search warrants at three of the school locations and the Oakland home of former American Indian Model Schools director Ben Chavis.
FBI spokeswoman Julie Sohn would not say when the investigation into AIMS started or what it entails.
"These are sealed search warrants, and they are part of an ongoing criminal investigation," Sohn said.
A state audit last year found that Chavis, who now lives in North Carolina, broke state laws, including the Political Reform Act, when he directed the school to hire his companies.
IRS special agent and spokeswoman Arlette Lee said agents were at all three school sites in Oakland from 5 p.m. Wednesday until about 1 a.m. Thursday. Speaking in general terms, she said the IRS investigates cases of tax fraud and other types of federal financial crimes such as money laundering.
"Whenever we work a case, we're trying to find out where the money comes from and where it's going," Lee said.
Agents searched Chavis' Oakland home and his mother-in-law's house, removing several boxes.
Chavis called the development a "strange coincidence," especially since an Alameda County judge ruled Monday that the charter can remain open while it appeals a decision by Oakland Unified School District to close it because of his alleged improprieties.
"If I stole money, put my (expletive) in jail, but keep the school open," he said. "They are out to punish the kids."
He said he welcomed the federal government's involvement because it will prove there was no wrongdoing on his part.
The school's current director, Nabeehah Shakir, said Thursday she did not know what the investigation was about.
"We're not focused on the FBI," Shakir said. "We're focused on keeping the school open."
Shakir said the FBI and IRS agents were respectful, did not make a mess and waited for children to go home for the day before they began their search.
In June, Chavis said the money he got from the school for renovation and construction was money he donated to the school and that he rented buildings to the school at below-market rates.
"If there is $3.8 million missing, there should be checks," Chavis said. "Show me the checks."
A lawyer for the school has argued Chavis did not break the law because he disclosed the contracts to his school board and recused himself from voting on them.
The Oakland school district revoked the school's charter in March based on the audit and ordered the school to close. The Alameda County Board of Education affirmed that revocation, but the school filed a lawsuit challenging the revocation, and on Monday an Alameda County judge issued an order allowing the school to stay open.
Oakland schools Superintendent Gary Yee said Wednesday he did not know about the federal investigation.
"The audit showed there were some state and federal funds involved, so it's my guess the investigation has something to do with that, but we really don't know," Yee said.
Doug Oakley covers Berkeley and the Oakland school district. Contact him at 510-843-1408. Follow him on Twitter @douglasoakley.