PHILADELPHIA, PA — Franklin Towne Charter High School and its former chief executive agreed to pay nearly $3.9 million to settle federal claims that the Philadelphia public charter school manipulated a January 2023 admissions lottery to reduce the chances of Black applicants being admitted, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced.
Franklin Towne will pay $3,639,328.77, while former CEO Joseph Venditti separately agreed to pay $275,000. The settlement amounts were based on analyses of their ability to pay, according to federal prosecutors.
The government alleged that Franklin Towne, acting through or at the direction of Venditti, interfered with what was supposed to be a random admissions lottery to disadvantage Black applicants.
At the time, the school received federal grant funding provided by the U.S. Department of Education and administered by Pennsylvania under the Elementary and Secondary Education Act and the Elementary and Secondary School Emergency Relief Fund.
Federal law prohibits schools receiving federal financial assistance from discriminating on the basis of race, color, or national origin. Prosecutors pursued the matter under the False Claims Act, which can impose liability when entities make false claims or representations connected to federal money.
“Selecting or excluding students because of their race is illegal and violates the agreements schools sign when they accept federal grant money,” U.S. Attorney David Metcalf said.
As part of Franklin Towne’s settlement, the Justice Department acknowledged that the school made significant governance changes. Those measures included replacing its CEO and hiring an independent third party to conduct future admissions lotteries.
The department credited those changes under its guidelines for considering voluntary disclosure, cooperation and remediation in False Claims Act matters.
The U.S. Department of Education’s Office of Inspector General participated in the investigation.
The matter was handled by Assistant U.S. Attorneys Peter Carr and Fernando I. Rivera, with assistance from litigative consultant Denis Cooke.
The settlements resolve civil allegations and do not constitute findings of liability. The government stated that the claims resolved by the agreements are allegations only and that there has been no determination of liability.
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