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A prestigious Lowcountry, South Carolina academy is once again under fire for its alleged efforts to hide evidence of financial malfeasance – and to retaliate against the former board member who exposed it.
Leaders of the Charleston Day School (CDS) allegedly engaged in “a deliberate and coordinated scheme” to suppress legitimate financial oversight and to “retaliate against a newly appointed trustee,” according to a lawsuit filed on Monday (February 10, 2025) in the S.C. ninth judicial circuit.
Charleston Day is also the focus of a federal lawsuit related to these allegations.
Of particular interest? The trustee bringing these cases, Charleston attorney Matt Austin, is among the frontrunners to become the next U.S. attorney for the state of South Carolina.
According to the state lawsuit (.pdf), Austin was removed from his role as a trustee after he began challenging the school’s allegedly improper applications for Covid-19 relief money. News of the questionable funding was first reported by this media outlet three years ago.
CDS and its leaders were also accused of punishing Austin’s wife, attorney Francie Austin, for “advocating on behalf of (her) child’s medical needs.” Not only that, the Austins’ children were summarily kicked out of the school as part of the alleged retaliatory scheme.
Named as defendants in the complaint are CDS, its former head of school Judith F. Arnstein, its former board chairwoman Emmie G. Hershey, its current board chairman James B. Hood, current board member Ross P. Hostetter and Lynne Maybank, the wife of a former board member.
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“The actions of CDS and board member defendants culminated in Mr. Austin’s removal from the board and the exclusion of the Austins’ children from (the school,” the filing alleged.
As previously reported, Charleston Day – which caters to some of the Holy City’s most affluent and influential families – allegedly lied to state and federal officials to secure tax money during the Covid-19 pandemic. Specifically, school leaders claimed more than half of their student body – 50.78% of students, to be precise – came from “low-income families.”
This opportunistic falsehood – which this media outlet has previously described as “outlandish” – nonetheless enabled the school to secure nearly $80,000 from the S.C. Department of Education (SCDE) as part of the federal government’s Emergency Assistance to Non-Public Schools (EANS) program.
In addition to suspected EANS fraud, questions were also raised about various Charleston Day disbursements tied to the nearly $600,000 the school received from the federal Paycheck Protection Program (PPP).
According to the lawsuit, CDS “misrepresented financial need and manipulated budget reports to justify PPP loan forgiveness and EANS grants.” When Austin requested records relating to these funds, the school cut off his access to the documents and engaged in “coordinated efforts to remove Mr. Austin from the (board),” according to the pleading.
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RELATED | DAMNING DETAILS UNEARTHED
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CDS has aggressively pushed back at these claims.
“Defendants vehemently deny that there was any misappropriation or misuse of any Covid relief funds received by the school and affirmatively assert that (the school) followed all laws and regulations for a recipient of these funds,” CDS attorneys claimed in one of their responses (.pdf) to the federal lawsuit.
The school also assailed the Austins, accusing them of working “collectively to undermine the board, head of school, teachers, and health care providers” by opposing Charleston Day’s mask mandates.
According to the lawsuit, Matt Austin “began investigating CDS’s financial practices, including the school’s application for and use of federal funds” in 2021.
“His inquiries were met with hostility and secrecy, including the unilateral removal of meeting minutes from the (trustees)’ internal portal and refusals to provide financial records,” the pleading alleged.
As for Francie Austin, during this time she was “advocating for accommodations for one of their children, who suffered from respiratory health issues.”
“Ms. Austin requested clarity and transparency regarding CDS’s mask policies and sought reasonable accommodations for her son’s medical needs,” the lawsuit claimed. “Instead of engaging in good faith, CDS and the (trustee) defendants stonewalled her requests, falsely characterized her advocacy as harassment, and secretly strategized ways to retaliate against the Austin family.”
“Internal emails, meeting minutes, and board member communications reveal that the (trustee) defendants deliberately linked Mr. Austin’s financial oversight efforts with Ms. Austin’s advocacy to justify a coordinated plan to remove Mr. Austin from the Board and refuse to allow their children to return for the next school year,” the complaint continued.
To view the filing for yourself, click on the link below…
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THE FILING…
(S.C. Ninth Judicial Circuit)
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ABOUT THE AUTHOR…
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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5 comments
Looks like on top of felony charges they will also end up slammed with a 42 U.S. Code § 1983 civil action. This even once happened to two now former 9th circuit prosecutors that acted out of order with a few private attorneys many years ago.
Does anyone know who served as counsel for Charleston Day School when all of this stuff was going on?
Never mind, I see Charleston Day School is represented by former Judge Bentley Price’s favorite attorney buddy Alice Paylor. Former Judge Price granted Alice Paylor’s clients at least five Motions For Summary Judgment, basically dismissing the cases against her clients four of which have been reversed by appellate courts. Not sure about the remaining Motion. If it is rotten and reeks of vindictiveness you will ultimately find certain people involved.
Just one more reason I don’t want my tax dollars going to South Carolina’s worst in-the-nation private schools.
Waiter, I’d like a full order of comeuppance with some red- hot vengence sauce, and a side order of crow. You can send it to the snobby grifter over at table 2, And let him know dessert is still coming….