Investigative Report: Voucher Fraud, Ghost Students, and the Real Cost of Arizona’s ESA Program

By Habari Entertainment Investigations

While Republican lawmakers loudly campaign on “stopping fraud” — especially when it involves immigrants or the Somali community — far less attention is paid to the fraud occurring inside one of their own signature policies: universal school vouchers.

Arizona’s Empowerment Scholarship Account (ESA) voucher program has become a case study in what happens when taxpayer money is handed out with weak oversight: “ghost” children, fake files, insider abuse, luxury spending, and hundreds of millions of unaccounted funds.

And unlike political talking points, this fraud is real, ongoing, and documented.

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What the ESA voucher program does

The ESA program allows parents to withdraw state education funding and spend it on:

• private school tuition
• homeschooling expenses
• tutors
• lessons and materials

It now costs over $1 billion per year and is projected to grow higher, even as Arizona faces budget shortfalls.

Supporters call it “school choice.”

Critics call it a transfer of public-school funding into private hands with minimal accountability.

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Verified fraud cases

1. “Ghost children” fraud — 43 kids that never existed

A Colorado couple used forged documents to enroll 43 fake children in Arizona’s ESA program.

They took more than $110,000 in taxpayer voucher money.

The money went to living expenses — not education.

They later pleaded guilty.

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2. Former education employees charged with $600,000 voucher theft

Three former Arizona Department of Education employees were charged in connection with a scheme that stole about $600,000.

How it worked:

• Fake students were created
• Fake disability labels were added to increase payout amounts
• The applications were internally approved
• Funds were diverted for personal use

This wasn’t sloppy paperwork. Prosecutors say it was organized theft of public education dollars.

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3. Additional criminal indictments

State investigators have announced multiple additional voucher-fraud indictments, including out-of-state participants using falsified student records to obtain Arizona voucher funds.

Investigations are ongoing.

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What else did taxpayers pay for

Even without outright fraud, lax oversight has enabled spending on:

• Piano lessons
• Horseback riding
• Dance lessons
• Driving schools

Auditors also flagged:

• unspent voucher balances exceeding $360 million
• purchases under $2,000 auto-approved with little review

In short, money is leaving public schools without proof that it’s improving education.

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The political contradiction

Republican officials have:

• Attacked Somali immigrants and Muslim communities over “fraud.”
• Pushed Trump-aligned narratives about “illegal benefits.”
• Campaigned on cracking down on government waste

At the same time, many of those same lawmakers:

• Expanded vouchers without strong verification
• Resisted transparency reforms
• Weakened auditing safeguards

The result?

A program with more proven fraud than the communities being scapegoated.

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Officials respond — and disagree

Arizona Attorney General Kris Mayes says:

• Investigations are active
• Litigation is possible
• Oversight must be strengthened

State Superintendent Tom Horne argues the system is effective and fraud is being caught — even as cases continue to surface and internal staffing is strained.

Meanwhile, school districts say public schools are being defunded, while voucher dollars flow to:

• Fake students
• Luxury services
• Untraceable accounts

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The bigger picture

This is the story:

Public schools are audited.
Teachers are credentialed.
District finances are monitored.

Voucher programs moved taxpayer money into a system where:

• Parents act as accountants
• Vendors face little scrutiny
• Eligibility is loosely verified

And — unsurprisingly — fraud followed the money.

Who could have guessed that handing state funding to unregulated private programs instead of education professionals might go wrong?

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Bottom line

Public outrage is being directed at communities of color.

But the largest documented fraud crisis in Arizona education today isn’t happening in Somali neighborhoods.

It’s happening inside Republican-backed school voucher programs that:

• Drain public schools
• Lack transparency
• Invite profiteering

Taxpayers deserve better than slogans.

They deserve oversight.