A Boston special school that was unregistered and illegal received hundreds of thousands of pounds of public money, a court was told.
Three people last week pleaded guilty at Lincoln Magistrates Court to charges of running Freiston Hall as an unregistered illegal school.
Freiston Hall, which has now been shut down, looked after children with highly complex physical and mental health needs with pupils living on site.
Patricia Hodgkinson, 78, of Hampstead, London, Dr Albert Okoye, 56, of Stanmore, Middlesex, and Clement Earle, 60, of East View, Walcott, near Billinghay, all received a conditional discharge and were ordered to pay £1,000 costs and a £20 victim surcharge.
The prosecution followed an Ofsted investigation into the school, which charged local authorities £1,200 a week for residential education per pupil,
Ofsted said six local authorities were misled into paying hundreds of thousands of pounds of public money for children to be educated at Freiston Hall, and said it clearly sought to identify itself as a school in its name, on its website and in other documents, with some local authorities saying they were assured by the school that it was registered.
Ofsted's Unregistered School Task Force began investigating Freiston Hall in September 2017 after it was suspected that it was operating without registration. Despite a warning issued by Ofsted, the school continued to operate illegally.
It found that the school had failed to carry out necessary staff suitability checks, to give first aid training to staff, and to supervise pupils adequately.
Ofsted carried out pre-registration inspections, which found that Freiston Hall was unlikely to meet the government standards. I
At a final unannounced inspection, inspectors found unsupervised children wandering around the premises. Staff were struggling to keep reasonable order and calm, while children became agitated and upset.
Freiston Hall closed after Ofsted issued the associated children’s home with a suspension notice. The children were removed and placed elsewhere.
Amanda Spielman, Ofsted’s Chief Inspector, said: "The people running Freiston Hall were receiving large amounts of public money from local authorities, which were paying for exceptionally vulnerable children to be educated in an unregistered, unsafe school.
"Registration is so important. Schools operating beneath the radar are not subject to regular inspection, so we cannot be assured that they are safe or providing good quality education. We want to send a clear message to those who continue to run unregistered schools, despite being warned not to. You will face justice.
"This case should also serve as a warning to local authorities. Decisions about placements must be made with due diligence. All local authorities should be carrying out the necessary checks to make certain that schools are registered with the Department for Education."