The Ramsey County Attorney’s Office is considering criminal charges against the founder of a popular Minnesota charter school accounting firm over allegations that he stole $42,500 from a predominantly Hmong school.
According to a civil lawsuit, the founder’s alleged fraud led to the dissolution of The Anton Group, a St. Paul–based firm that in 2022 provided accounting services to dozens of Minnesota charter schools. Cumulatively, the budgets for these charter schools and affiliated companies add up to more than $240 million a year.
Neal Thao, the CEO of Noble Academy, said he was “speechless” when the school’s bank alerted him to suspicious activity from Noble Academy’s longtime accountant, Michael Pocrnich. Noble Academy’s bank notified the school about a potentially fraudulent transfer of more than $100,000 into a secret account controlled by Pocrnich, according to a civil complaint. The school voided that transfer.
According to a document from a state regulatory board, Pocrnich’s colleagues later found that he had already transferred $42,500 from Noble Academy to the secret account, and then transferred $12,000 from the secret account to his personal account.
“The money should be going toward the students and their education. Period,” Thao said. “We just cannot afford to lose any dime just because people like that were trying to take advantage of the students.”
In May 2023, the Minnesota Board of Accountancy, which has state authority to license and investigate complaints against accountants, issued an order revoking Pocrnich’s CPA license for five years because of the alleged fraud. Pocrnich signed the stipulation and consent order, waiving his right to appeal without admitting to the truth of the allegations.
Pocrnich has not been charged with any crimes. After initially receiving a referral from the St. Paul Police Department, the Ramsey County Attorney’s Office sent the case back to the police for further investigation. The St. Paul Police resubmitted the case to the county attorney on September 20. The case is now “under review for charging consideration,” said Dennis Gerhardstein, a spokesperson for the Ramsey County Attorney’s Office.
Molly McMillen, a spokesperson for the St. Paul Police Department, said the department was “trying to ensure that we have every detail necessary to bring justice to this case.” She added that “financial cases in particular can take a long period of time.”
Contacted by Sahan Journal, Keith Moheban, a lawyer for Pocrnich, declined to comment on his client’s behalf. Pocrnich did not respond to multiple requests for comment. No one else from The Anton Group has been accused of any wrongdoing in the case.
The alleged fraud and the subsequent dissolution of The Anton Group led to a lawsuit and a countersuit among the accountants at the firm. Kyle Knudson, a former partner at The Anton Group, sued Pocrnich in November 2022, alleging that Pocrnich sold him shares of the company at an inflated price by failing to disclose his “wrongful conduct.” Knudson’s complaint provides a detailed picture of Pocrnich’s alleged fraud at Noble Academy.
In court filings responding to Knudson’s lawsuit, Pocrnich declined to address the fraud allegations.
“With respect to allegations that, if true, would tend to incriminate him, Pocrnich declines to respond other than to assert his constitutional rights under the Fifth Amendment of the United States Constitution and corresponding protections under the Minnesota State Constitution,” Moheban wrote in an answer to the civil suit filed in Ramsey County District Court.
In response to Knudson’s complaint, Pocrnich countersued his former partners at The Anton Group, claiming they failed to compensate him for his shares of the former company, and illegally transferred assets to their new accounting firm. In July, a judge dismissed Pocrnich’s counterclaims. Court records now show the case listed as closed. The parties have reached a settlement, according to a spokesperson from the Minnesota Court Information Office.
‘There’s not a lot of people who understand charter-school accounting’
Noble Academy began enrolling students in 2007, and its curriculum includes lessons in Hmong heritage language and culture.
Last year, the Brooklyn Park–based school served nearly 600 students in grades K–8; 88 percent of its students are Asian. In 2022, the Minnesota Department of Education identified Noble Academy as a “high-quality charter school” on the basis of its academic and financial strength. This designation makes the school eligible to apply for certain grants.
Publicly available tax filings show that Noble Academy paid The Anton Group more than $108,000 for financial consulting and accounting services in the 2019–2020 school year. That year, the school reported total revenue of $11.5 million.
“We are grateful for the hard work of professionals who detected these crimes against the school and worked to stop them,” said Mai Yia Chang, the superintendent of Noble Academy, in an email to Sahan Journal. “We will continue to focus on educating our students and supporting their families.”
Pocrnich, a 43-year-old Shakopee resident, graduated from St. John’s University with an accounting degree in 2002 and obtained his public accounting certificate in 2007, according to court filings. In 2013, he incorporated The Anton Group, taking the name from his grandfather, a Croatian immigrant.
By 2021, the company reported annual revenue of nearly $3 million. As the firm grew, it became a fixture in the world of Minnesota charter schools—and so did its partners. From 2020 to 2022, Pocrnich served on the Minnesota Department of Education’s Advisory Committee on Financial Management.
In 2022, The Anton Group provided services to at least 34 charter schools totaling more than 12,000 students, according to a Sahan Journal analysis of charter school board minutes and civil court filings. Put another way, the firm provided accounting services for nearly one in five charter schools statewide. Seventy percent of the students at these schools were kids of color. In 2022, those schools and their affiliated companies reported combined annual revenue of nearly a quarter of a billion dollars.
Tonicia Abdur Salaam, the head of school at JJ Legacy School, used The Anton Group’s services until the firm folded in the summer of 2022. She said that many charter schools contracted with the firm in part due to a lack of options.
“There’s not a lot of people who understand charter-school accounting,” she said. “It’s unnecessarily and unreasonably complicated.” Despite the small size of Abdur Salaam’s school—about 110 students and a $3 million budget—she paid The Anton Group $60,000 annually, she said.
In the wake of the alleged fraud, The Anton Group’s other partners voted to dissolve the company in August 2022, according to Knudson’s lawsuit. Business filings from the Minnesota Secretary of State show that Pocrnich’s former colleagues from The Anton Group then incorporated a new accounting firm, EdFinMN, the next day.
According to civil court documents, many of The Anton Group’s clients retained EdFinMN as their accounting firm for the 2022–23 school year. One of these clients is Noble Academy.
The fraud allegations
Both Knudson’s legal complaint and the Minnesota Board of Accountancy’s order lay out a timeline of the alleged fraud. Some details appear in only one of the documents, and the Minnesota Board of Accountancy’s findings omit the names of affected parties. But taken together, these documents present a consistent picture of the alleged fraud.
According to Knudson’s complaint: In early February 2022, Pocrnich made two transfers totaling $42,500 from Noble Academy’s account to a bank account in The Anton Group’s name. Pocrnich’s colleagues believed that this account had been closed for years. Then, in late February, he attempted to transfer another $106,071.48 from Noble Academy to this secret account. That money was supposed to be sent to the school’s management company, Excellence in Education. Noble Academy’s bank flagged this transaction as potentially fraudulent, and the school voided the transfer.
The Minnesota Board of Accountancy order provides further details: In March 2022, Pocrnich made four transfers of $3,000 from The Anton Group’s secret bank account to his personal account. On March 21, another member of The Anton Group discovered the transactions totaling $42,500 from the school to the secret bank account. She asked Pocrnich to provide invoices for these transactions, which he could not provide.
Instead, according to Knudson’s complaint, Pocrnich transferred $42,500 to Noble Academy from the school’s building company, where he was the treasurer. (Many charter schools operate a separate building company to purchase and develop a school property; under state law, charter schools cannot own their buildings directly.) In other words, Pocrnich was allegedly repaying the money he’d stolen by tapping the school’s own building funds.
He also offered to pay another member of The Anton Group to keep quiet about his theft, according to both the legal complaint and the Board of Accountancy’s findings. This colleague declined his offer, according to Knudson’s complaint, and instead informed The Anton Group’s other partners about Pocrnich’s “misconduct.”
On March 25, The Anton Group suspended Pocrnich without pay. Scott Brown, a partner at The Anton Group, reported Pocrnich’s apparent fraud to the St. Paul Police Department. In searching Pocrnich’s office, the police found narcotic drugs and paraphernalia, according to an incident report and Knudson’s civil complaint. (St. Paul police did not refer the drug case for charges, “given a lack of evidence,” said McMillen, a department spokesperson.)
The Board of Accountancy’s findings detail the resolution of the transferred funds: On April 26, Pocrnich repaid The Anton Group for the $12,000 he had transferred to his personal account. Then, on May 3, The Anton Group refunded $42,500 to Noble Academy.
Contacted by Sahan Journal, Brown declined to comment on Pocrnich and The Anton Group, citing pending litigation.
Speaking more generally about fraud detection and prevention, he said that organizations should discuss internal control mechanisms like bank reconciliations. That’s a process of comparing on-the-books transactions and cash balance to find any discrepancies. Typically, someone who has not personally made the transactions completes the bank reconciliation process.
“When it comes to recent alleged frauds in the media or bad investments, in my opinion, strong bank reconciliations would have allowed detection and reporting,” Brown said.
Holding the accountants accountable
Charter schools are, by design, independent and autonomous. And they are often small. The median Minnesota charter school district serves just over 200 kids. These small schools frequently hire outside contractors to provide some services that large public school districts may provide in-house, such as food services and accounting.
“Most of our schools probably hire an outside party to do their accounting because they don’t have the capacity to do it,” said Eugene Piccolo, executive director of the Minnesota Association of Charter Schools. “The question has always been what kind of oversight schools are doing of their accounting firms. We’ve seen, over the years, accounting firms who actually kind of end up running the school.”
Piccolo said he’s seen school-board meetings in which “everybody kind of nods and agrees” to recommendations from the accounting firm, which he called “an abdication of the board’s responsibility.”
He also identified a problem in allowing Pocrnich, as a contracted accountant, to serve as the treasurer of Noble Academy’s two affiliated building companies.
“Anybody who provides a service to this school cannot be on the board of the school,” Piccolo said. “That’s just a blatant conflict of interest. Especially if it’s money and you’re the accountant and you’re also the treasurer. There’s absolutely no separation of things there. Because you can basically steal as an accountant, and cover it up as the treasurer.”
According to public records, the new treasurer for the Noble Academy’s building companies is the school’s current accountant: Kyle Knudson. (Knudson is performing this work as a partner at EdFinMN: the accounting firm reformulated by previous partners at The Anton Group.)
Knudson and an attorney representing him did not respond to a request for comment. Chai Vang, who serves as board chair of Noble Academy as well as its affiliated companies, did not address a question about the perceived conflict of interest.
Erin Anderson, the director of charter school authorizing at Osprey Wilds Environmental Learning Center, provides oversight for Noble Academy and more than 30 other charter schools. Contacted September 19 by Sahan Journal, she said she was not aware that Knudson was now the treasurer for Noble Academy’s building companies.
“I will be following up on that today,” she said.
An isolated incident?
In the wake of the incident at Noble Academy, Anderson said that she reviewed the finances of other schools in her authorizer portfolio.
“We did, through our authorizer oversight, ensure there had been no other fraud in any of the other schools,” she said. The Anton Group also assured Osprey Wilds that it had conducted an internal check for further fraud. “We were reasonably sure there had not been fraudulent activity at any of the other schools we had authorized,” Anderson said.
Ultimately, the Minnesota Department of Education could step in to investigate fraud allegations at charter schools. But it’s not clear whether the agency will do so in this instance.
Kevin Burns, a department spokesperson, said that the agency’s new inspector general, Patrick Wolfgram, would get involved with allegations involving the theft of state funds. But Burns added that the inspector general is not currently involved in this case.
The Minnesota Legislature created the inspector general position in the wake of the Feeding Our Future fraud, which federal law-enforcement authorities have called the largest COVID-19 fraud in the country. Wolfgram started his position as the agency’s first inspector general on September 5.
Thao, Noble Academy’s CEO, cautioned other schools to pay attention.
“I think everybody should take a look at their transactions,” Thao said. “Everybody should worry about it. They should look at their account very carefully.”
Records indicate Pocrnich is now working as a client manager for EdTec, a national charter school support organization providing services to more than 150 schools across the country. The role of a client manager, according to the company’s website, is to help schools meet financial and compliance requirements by providing “CFO-level expertise and analysis.”
Cynthia Tu contributed reporting and data analysis.