Charter school transferred nearly $1 million to CEO in years prior to closing

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(Source: 3TV/CBS 5) (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

Hundreds of students and their parents were blindsided on Monday morning when they arrived at Goodyear’s Discovery Creemos Academy and found the charter school shuttered.

Many were unaware of the extent of the financial trouble the school had gone through for the past few years. But it appears that at least part of that trouble was exacerbated by payments made to school administration.

Tax returns obtained by CBS 5 Investigates show an increasing amount of money paid to and transferred to Discovery Creemos Academy president and CEO Daniel Hughes and entities controlled by Hughes in the years prior to the school’s abrupt closure.

In the 2014 IRS Form 990 filing, the school showed a salary to Hughes of $60,736. But the following year, 2015, Hughes’ salary had increased to $100,000.

The filing also showed hundreds of thousands of dollars in reimbursements to Hughes for “Purchases on behalf of the school,” “Reimbursements of amount due,” and “Purchases and payments on revolving agreement.”

The payments were made to Hughes and to Creemos Association, which is a separate organization owned by Hughes.

The payments to Hughes and Creemos in 2015 totaled $949,000, according to the tax filings. 2015 is the most recent year on record, but a financial audit conducted in 2017 showed the school was still in financial trouble. The State Board of Charter Schools rated Discovery Creemos’ financial situation as “Not Acceptable.”

Hughes responded to an email sent by CBS 5 Investigates.

“I am unable to do an interview but if you have questions we can answer for you, please feel free to ask and someone will respond with a statement to address them,” Hughes wrote.

He did not respond to specific questions about the payments.

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Morgan  LoewMorgan Loew is an investigative reporter at CBS 5 News. His career has taken him to every corner of the state, lots of corners in the United States, and some far-flung corners of the globe.

Click to learn more about Morgan .

Morgan Loew
CBS 5 Investigates

Morgan’s past assignments include covering the invasion of Iraq, human smuggling in Mexico, vigilantes on the border and Sheriff Joe Arpaio in Maricopa County. His reports have appeared or been featured on CBS News, CNN, NBC News, MSNBC and NPR.

Morgan’s peers have recognized his work with 11 Rocky Mountain Emmy Awards, two regional Edward R. Murrow Awards for investigative reporting, an SPJ First Amendment Award, and a commendation from the Humane Society of the United States. In October 2016, Morgan was inducted into the National Academy of Television Arts and Sciences Silver Circle in recognition of 25 years of contribution to the television industry in Arizona.

Morgan is graduate of the University of Arizona journalism school and Concord Law School at Purdue University Global. He is the president of the Arizona First Amendment Coalition and teaches media law and TV news reporting at ASU’s Walter Cronkite School of Journalism and Mass Communication.

When he’s not out looking for the next big news story, Morgan enjoys hiking, camping, cheering for the Arizona Wildcats and spending time with his family at their southern Arizona ranch.

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