The founder and former chief executive officer of Celerity Educational Group, a Koreatown-based nonprofit company that owned and operated charter schools, has agreed to plead guilty to a federal conspiracy charge for misappropriating approximately $2.5 million in public education funds awarded to several charter schools.

In a plea agreement filed on Dec. 21 in United States District Court, Vielka Maritza McFarlane, 56, agreed to plead guilty to one count of conspiracy to misappropriate and embezzle public funds. McFarlane admitted in the plea agreement that she used the money to pay for personal expenses, including first-class air travel, dining and the purchase of luxury goods. The bulk of the misappropriated funds were used to purchase a building for another charter school in Ohio.

The defendant founded Celerity Educational Group in 2004 and served as its CEO until April 2015. From April 2012 to April 2017, McFarlane also was CEO of Celerity Global Development, a nonprofit California corporation that provided management services to the Celerity charter schools in exchange for a percentage of the schools’ revenues.

According to her plea agreement, from July 2009 to April 2017, McFarlane and her co-conspirators falsely certified to federal, state and local authorities that they were complying with all rules and regulations governing the use of public funds that they received.

McFarlane admitted in her plea agreement that she used public funds – money that should have been spent on educational purposes at Celerity charter schools – for a variety of personal expenses and improper expenditures. For example, between 2009 and 2013, McFarlane used credit cards issued to Celerity Educational Groups and Celerity Global Development to make personal purchases, including luxury items from shops in Beverly Hills and Tokyo, customized recumbent bicycles for her and her spouse, and more than $5,000 in leather-making equipment used by a for-profit company in which McFarlane and her family members were partners. McFarlane further admitted that she did not reimburse Celerity Education Group or Celerity Global Development for any of the payments described in the plea agreement prior to the government’s criminal investigation.

The plea agreement also states that from late 2012 to June 2014, McFarlane conspired to use approximately $2.3 million in public funds – a substantial portion of which came from the United States Department of Education – awarded to Celerity’s charter schools in Los Angeles to purchase and renovate an office building in Columbus, Ohio, where she oversaw the founding of a separate charter school.

Additionally, McFarlane admitted using public funds awarded to the Celerity charters schools in 2013 to pay $157,957 for the security deposit, monthly rent and renovations at a soundstage and recording studio in Canoga Park, which was rarely used by the Celerity charter schools. McFarlane pursued a proposal to allow a digital-production company to use the studio space in exchange for 200,000 shares in the digital-production company, which would have been issued to a separate for-profit media-production business called The Muse Collective.

Once McFarlane pleads guilty, she faces a statutory maximum penalty of five years in federal prison for the conspiracy charge.

In June 2017, the U.S. Attorney’s Office entered into a non-prosecution agreement with Celerity Educational Group, now known as ISANA Academies, in which ISANA recognized and acknowledged the misconduct committed by McFarlane, agreed to cooperate fully with the government’s investigation, and agreed to implement certain reforms designed to ensure that similar conduct does not occur again.

By entering into the non-prosecution agreement, the U.S. Attorney’s Office recognized that ISANA is responsible for educating thousands of students from underserved neighborhoods throughout Los Angeles County, and has demonstrated a strong commitment to its students and their academic achievement. The reforms now implemented by ISANA should allow it to continue serving its students and communities.