StarShine owner used school funds on Hawaiian vacations and 'spiritual healers,' documents say

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StarShine Academy (Source: 3TV/CBS 5 News) StarShine Academy (Source: 3TV/CBS 5 News)

As a Phoenix charter school sank deeper in debt, its owner spent taxpayer dollars on two Hawaiian vacations, a European vacation, her personal gym membership, and sessions with “spiritual healers” and “Master Clairvoyants,” according to a court-appointed investigator.

The spending details, revealed in bankruptcy court paperwork, shed new light on the financial picture at StarShine Academy. The State Board for Charter Schools voted last week to begin shutting down the school and revoking the charter from owner Patricia McCarty.

[RELATED: Phoenix charter school to close due to 'egregious financial mismanagement']

A court-appointed trustee flagged at least $37,157 of spending by McCarty that the trustee considered inappropriate. The expenditures, from July 2016 until September 2017, represent “some of the more egregious expenses” but are far from all of them, the trustee noted.

In a phone interview, McCarty denied misspending school funds but declined to discuss specific expenditures.

“I care about what I do. I care about the quality of what I do. And most people who know me know I care about what I'm doing for the right reason,” McCarty said.

In the court documents, the United States Trustee for the District of Arizona accused McCarty of “fraud, dishonesty, incompetence, gross mismanagement, and breach of fiduciary duty to creditors.”

When investigators challenged some of McCarty’s expenses, she provided supporting documents with “outright fabrications, intended to disguise that she was using taxpayer funds from the school to pay her personal expenses,” the trustee wrote.

Among the flagged expenses:

  • McCarty claimed she spent $623.52 on January 4, 2018 on “Waste Management Large Container Drop Off for Tree Branches.” A former employee told investigators the expense was actually for the Waste Management Open.
  • McCarty spent $94.60 at a Walmart on December 4, 2017, listing the expense as “classroom supplies, poster board, toilet paper, cleaning supplies, and art supplies.” The Wal-Mart was in Kailua-Kona, Hawaii. “Why would anyone buy classroom supplies… when you have to pack them up on an airplane to get to the school?” the trustee wrote.
  • On August 25, 2017, McCarty spent $214.90 on something listed as “520 Trafficschool.c” on the StarShine bank statement. McCarty claimed the expense was for a “Traffic Safety Curriculum for Schools.” However, the investigator determined it was actually for an online defensive driving course. McCarty also spent $90 on what she labeled “Town of Paradise Valley Community Breakfast on Education.” The investigator said it instead appears to be a payment to the Town of Paradise Valley for a traffic ticket.
  • On January 12, 2018, McCarty spent $500 for a purchase at “Spirit Repair, LLC, in North Carolina.” She told investigators it was for a “Spirit Repair Heart Math School License to raise math student test scores.” Instead, the investigator said McCarty purchased a session with a spiritual healer and clairvoyant.

StarShine Academy amassed nearly $3 million in debt, according to bankruptcy records. The school’s debts grew as “McCarty was engaging in this misappropriation of school funds,” the trustee wrote.

The State Board for Charter Schools says it will shut down StarShine after this school year.

McCarty said she is in the process of selling the school buildings to another charter school operator. She said she hoped the new operator would be able to open a school by the start of next school year.

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Derek StaahlDerek Staahl is an Emmy Award-winning reporter and fill-in anchor who loves covering stories that matter most to Arizona families.

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Derek Staahl

This once-uncompromising "California guy" got his first taste of Arizona in 2015 while covering spring training baseball for his former station. The trip spanned just three days, but Derek quickly decided Phoenix should be his next address. He joined CBS 5 and 3TV four months later, in August 2015. Before packing his bags for the Valley of the Sun, Derek spent nearly four years at XETV in San Diego, where he was promoted to Weekend Anchor and Investigative Reporter. Derek chaired the Saturday and Sunday 10 p.m. newscasts, which regularly earned the station's highest ratings for a news program each week. Derek’s investigative reporting efforts into the Mayor Bob Filner scandal in 2013 sparked a "governance crisis" for the city of San Diego and was profiled by the region’s top newspaper. Derek broke into the news business at WKOW-TV in Madison, WI. He wrote, shot, edited, and presented stories during the week, and produced newscasts on the weekends. By the end of his stint, he was promoted to part-time anchor on WKOW’s sister station, WMSN. Derek was born in Los Angeles and was named the “Undergraduate Broadcast Journalism Student of the Year” in his graduating class at USC. He also played quads in the school’s famous drumline. When not reporting the news, Derek enjoys playing drumset, sand volleyball, and baseball.

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