An investigation into employment practices at the Myron B. Thompson Academy took a dramatic turn Monday when the state attorney general seized computers and more than 50 boxes of documents from the public charter school.

The search warrant executed at the online school’s offices at the Richards Street YWCA is part of a criminal probe by the Department of the Attorney General into possible theft of state funds, including paying staff for hours that they did not work. Charter schools use public funds and offer a free education but report to their own governing boards rather than the Board of Education.

Principal Diana Oshiro and the co-chairmen of the academy’s governing board, Myron K. Thompson and Malia Chow, did not respond to several requests for comment. An administrative report on the school issued in February by the attorney general highlighted questionable practices and made recommendations but did not lead to any charges.

Christopher Young, supervising deputy attorney general, said he couldn’t comment on the situation.

"This is an ongoing criminal investigation," Young said. "The administrative investigations are done separate and aside from any criminal investigations."

The raid, caught on video by Hawaii News Now, came as the online school prepared to close the books on the fall semester, which ends this week. Thompson Academy students do much of their learning at home, communicating with their teachers via computer.

The school administration told the Public Charter School Commission on Tuesday that the raid had affected operations, according to Tom Hutton, the commission’s executive director. The school has 511 students in kindergarten through 12th grade.

"It’s really regrettable timing for the operation of a school, when you’re a week away from the end of the semester," Hutton said, adding that much has changed at the state’s charter schools since authorities first began looking into operations at Thompson Academy nearly three years ago.

"In part as a result of concerns over situations like this, which occurred years ago, we have completely revamped our chartering system in the state," he said. "These are the tail ends of the process. … We have a lot more assurances in place for the public than were in place even a year ago."

Young said that if the attorney general’s removal of materials makes it hard for the school to function, "we’ll address it appropriately."

In December 2010 the Honolulu Star-Advertiser revealed that the principal’s sister, Kurumi Kaapana-Aki, was the elementary school vice principal while holding down a full-time job as a flight attendant. Three of Kaapana-Aki’s sons were also on the school’s payroll, including one who was athletic director although the school had no sports teams and he did not teach the online PE course. Former staff members quoted in the article complained of favoritism at the school and erratic attendance by Oshiro’s family members.

The Charter School Review Panel evaluated the situation and in April 2011 referred the matter to the state attorney general and the state Ethics Commission for investigation. Its concerns focused on whether the online school followed the fair-treatment provisions of state law in hiring the principal’s relatives; whether the vice principal flew on state time and was paid too much; and whether the school’s transfer of $175,000 in public funds to a nonprofit was a proper use of state funds.

The Charter School Commission has withheld $255,000 from Thompson Academy at the direction of the Legislature pending the outcome of the ethics investigation.

The current criminal probe is headed by former Honolulu Police Department Maj. Daniel Hanagami, who became the chief special investigator for the attorney general in August.

In September his office started issuing subpoenas seeking information about the school’s operations. It asked for records from the Hawaii State Teachers Association as well as the state Ethics Commission, which has been conducting its own investigation of possible ethics violations at the school.

At a hearing before Circuit Judge Richard Perkins last month, Hanagami indicated investigators needed the data from various sources to verify information provided by administrators at the school.

"We’re not comfortable with the information from MBTA," Hanagami told the judge, who then ordered the union to turn over documents including a list of HSTAmembers and any provisions allowing employees to deviate from the union contract.

On Dec. 12 the judge also directed the Ethics Commission to share with the attorney general any materials it had gathered in its investigation "including the charges served upon personnel of the Myron B. Thompson Academy, to include Kurumi Kaapana-Aki and Diana K. Oshiro."

Because Ethics Commission investigations are confidential, Executive Director Les Kondo said Tuesday the commission wanted a court order before handing over the documents but is happy to cooperate. Charges levied by the Ethics Commission do not become public until a notice of hearing is published.

The administrative report from the attorney general issued in February deferred to the Ethics Commission on whether relatives had received preferential treatment at Thompson Academy. It called a $35,000 bonus or "administrative pay differential" paid to Kaapana-Aki "questionable." But it said it had not found that abuse had occurred regarding her hours as a flight attendant.

It also found that the school had purchased curriculum materials from Christian publishing companies, a possible constitutional violation, but added that Thompson Academy administrators later dropped one vendor and kept the other after it agreed to remove religious references from its curriculum materials.

As far as the $175,000 in public money transferred to a nonprofit affiliated with the school, the attorney general noted that $25,000 had been repaid, but advised the commission to require Thompson Academy to account for the rest of the money.