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Audit blasts Val Verde Unified’s ties with elite private boarding school in China

March 19, 2026

A scathing audit has found that the Val Verde Unified School District in Perris, along with former top state education officials, may have engaged in corrupt practices and illegal activity tied to a private boarding school in China that serves as a student pipeline to top American universities.

In more than 1,000 pages, auditors for the Riverside County Office of Education and superintendent of schools detailed improprieties in the 10-year-old partnership between Val Verde Unified and Pegasus California School in Qingdao, China. Among their findings was that Val Verde had no legal authority to issue high school diplomas to nonresident students attending Pegasus.

Additionally, Val Verde’s relationship with Pegasus may have involved fraud, misappropriation of public funds, conflicts of interest, breaches of fiduciary duty and other unlawful fiscal practices, the audit concluded.

The audit, completed Feb. 19 by the Los Angeles law firm Larson LLP, identified a network of local and state education officials and affiliates instrumental in establishing and promoting Pegasus, including David Long, former California secretary of education and Riverside County superintendent of schools; Tom Torlakson, former state superintendent of public instruction; and former Val Verde Unified Superintendent Michael McCormick.

According to the audit, the three used their public positions to support and promote the program, recruit staff and facilitate Pegasus students’ access to U.S. colleges.

Val Verde Unified comprises more than 19,000 students and 24 schools in Perris, Moreno Valley and Mead Valley in Riverside County.

Former State Superintendent of Public Instruction Tom Torlakson in this undated photo.

“Our responsibility is to safeguard the integrity of public education and ensure that taxpayer resources are used lawfully and transparently,” Riverside County Superintendent of Schools Edwin Gomez said in a news release on Wednesday, March 18.

Gomez said his office notified Val Verde’s governing board, the district attorney’s office, the state controller and the California superintendent of public instruction about the audit, and said his office will fully cooperate with any follow-up investigations to ensure appropriate corrective action is taken.

“This audit identified serious concerns that merit further review by the appropriate authorities,” Gomez said.

Origins of Pegasus

The audit traces Pegasus’s origins to 2013, when businessman Steven Ma, who according to the audit refused to be interviewed by auditors, worked to create Pegasus and its program with Long, Torlakson and McCormick, among others.

Before establishing Pegasus, Val Verde already had maintained a longstanding consulting relationship with Long’s consulting business, David Long & Associates, or DLA, which he started in 2008 following his service as California’s secretary of education. From 2009 to 2020, the district paid DLA about $1.2 million, according to the audit.

In 2014, Torlakson signed a collaboration agreement with the mayor of Qingdao. And in 2017, Torlakson appointed Ma and Long as state “international education liaisons,” according to the audit.

Pegasus marketed itself as offering a California-style education with credentialed teachers and pathways to top U.S. universities.

Former Val Verde Unified Superintendent Michael McCormick at a school board meeting on Tuesday, Oct. 3, 2023. (Photo by Anjali Sharif-Paul, The Sun/SCNG)

In 2016, the year Pegasus opened, Val Verde approved a “sister school” relationship with the school, followed in 2017 by a controversial pilot program allowing the district to issue diplomas to Pegasus students who met district requirements.

However, auditors concluded Val Verde improperly issued diplomas, finding “no evidence indicating that Pegasus students satisfied all course requirements and proficiency standards,” nor did they meet residency requirements.

“Rather, the evidence indicates that there was inadequate oversight over Pegasus’s curriculum and that Pegasusemployed some non-California-credentialed teachers,” according to the audit. “This also demonstrates a lack of sufficientinternal controls.”

Benefits and perks

Long later served as Pegasus board chairman, helped recruit teachers and promoted the program to colleges. In a telephone interview, he said he also served as Pegasus’ principal and academic leader for several years. McCormick supported the district’s partnership with Pegasus, encouraged district staff to participate and issued Val Verde Unified diplomas to Pegasus students, according to the audit.

Val Verde staff who opted to work at Pegasus received special benefits and perks, including free housing and travel. In December 2016, according to the audit, McCormick sent an email to all Val Verde employees encouraging them to take a leave of absence to work for Pegasus. Those who accepted received their salaries and benefits from Pegasus, and, upon returning to Val Verde, they received raises.

Long, Torlakson and McCormick also may have received special benefits and perks related to Pegasus, according to the audit. Long was made a director of one of Ma’s companies, ThinkTank Learning Inc., which at one point was a shareholder for Pegasus.

Torlakson, according to the audit, received campaign contributions of at least $13,600 from Ma via his ThinkTank company, as well as free travel and accommodations in China to visit Pegasus. McCormick, according to the audit, also received free travel and accommodations in China to visit Pegasus, and was also offered a paid consulting job with Pegasus.

Other Val Verde staff who benefitted from Pegasus, according to the audit, included Assistant Superintendent Garrick Owen and his wife, Michele, who entered into employment agreements with Pegasus in 2017 to work as the school’s headmaster and as a science teacher, respectively. At the time, Garrick Owen also was serving as Val Verde’s education services coordinator, a potential conflict of interest, according to the audit.

Additionally, Ma’s company, ThinkTank, paid Owen $2,400 for consultant work, and Long’s company, DLA, paid him $3,600 in 2018 and $7,200 in 2019, also for consultant work. Owen told auditors he believed the payments were routed through ThinkTank and DLA because Pegasus lacked a U.S. bank account.

Diplomas lacked legal authority

The audit cited a 2021 investigation by Business Insider, the first to address the controversy surrounding Pegasus California School, its connection to Val Verde and the concerns about a U.S. public school district issuing diplomas to private school students overseas.

The audit noted that, among other things, the article reported, “Pegasus guaranteed its students that they would be admitted to top 100 United States universities” and the Val Verde Unified School District issued high school diplomas to Pegasus students “without sufficient legal authority.”

The article also pointed out the relationship between Ma, Torlakson and Long.

“Further, it raised questions regarding whether the relationship between Pegasus and VVUSD constituted a conflict of interest or caused VVUSD funds to be improperly used for Pegasus,” the audit said.

Full compliance

District administrators did not respond to a request for comment, but spokesperson Alex Sponheim said in an email that the district “has fully complied with the audit process regarding Val Verde’s partnership with Pegasus California School from 2016-2020. We remain focused on providing transparency and continuing to serve our students, families and community.”

School board President Melinda Young said the alleged activities covered in the audit occurred before she joined the school board in 2022. “Since taking office, I have remained committed to transparency, accountability and to serving the best interests of our students and the community,” Young said.

Torlakson and McCormick did not return telephone calls seeking comment.

Long strongly disputed the audit’s findings, calling them “serious” and “false.” He said at least four or five prior audits have been conducted on the same issue, and specifically noted one by the state Fiscal Crisis and Management Assistance Team that he said cleared Pegasus and contradicts the recent audit.

“This audit contains a multiplicity of complete false accusations,” Long said. “Every aspect of the process and relationship was checked with the state and with attorneys.”

The audit said investigators requested to interview Long, McCormick and Torlakson, but they either did not respond or were unavailable for interviews. Long disputed that assertion, at least as it applied to him. He insisted no one reached out to him about the audit.

“No phone call, no emails, no texts. Nothing. It’s just not true,” he said in the phone interview with the Southern California News Group.

He said the diploma program was approved in writing by the state superintendent and vetted by attorneys, and that the Val Verde school board acted responsibly throughout. He also argues that the audit mischaracterizes payments to his consulting firm.

“An interesting section of the audit said I received $1.2 million over an eight- or nine-year period. It does not mention that five employees were paid from that amount,” Long said.

Long said all pay he received from Pegasus was legitimate consulting pay for extensive work in the U.S. and China, and he emphasized the program’s educational benefits, including student exchanges and use of a California curriculum. He denied any personal financial gain by district officials.

The program, he said, was “ethical, well-vetted and successful.”

Audit blasts Val Verde Unified’s ties with elite private boarding school in China Orange County Register

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Audit blasts Val Verde Unified’s ties with elite private boarding school in China

Origins of Pegasus

Benefits and perks

Diplomas lacked legal authority

Full compliance

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