When state officials questioned more than $10,000 in public funds paid to a purveyor of essential oils, the former director of a Kalihi charter school under investigation for racking up suspicious charges credited the therapy for "remarkable" results in averting a heart attack and healing a spinal injury, broken bones and other everyday ailments afflicting Halau Lokahi Public Charter School students and staff.

The payments to Rainbow Healing Arts are among nearly $102,000 in school expenses throughout 2013 and 2014 flagged as suspicious by the state Public Charter School Commission, and that prompted a raid of the campus in November by the state Attorney General’s Office.

The commission overseeing public charter schools took the first step last week toward shutting down the school for insolvency, voting to revoke the charter. The Hawaiian-focused school had run out of money before the end of last school year, and stopped paying its staff and rent, ending that year with a $502,000 deficit.

Court documents seeking a judge’s approval for a search warrant, recently obtained by the Honolulu Star-Advertiser, reveal details about the state’s investigation into suspected first-degree theft, money laundering, falsification of business records and tampering with government documents by the school’s founder and longtime director, Laara Allbrett, who was forced to resign in July.

The records indicate Allbrett allegedly used a false billing scheme and other methods to expend school funds for personal use on travel, food, jewelry and alternative healing.

"It appeared that Laara Allbrett utilized the Halau Lokahi Charter School as a mechanism to appropriate state of Hawaii monies so that her friends, family members, and (she) could benefit from these proceeds, which appears to be theft of public funds," Daniel Hanagami, chief special agent for the attorney general’s Investigations Division, said in a search warrant affidavit.

The office executed the search warrant on Nov. 25, seizing financial and personnel records as well as computers.

Allbrett could not be reached for comment and school officials did not immediately return a call seeking comment Friday.

Halau Lokahi, founded in 2001, had about 114 students in kindergarten through high school grades, who are being assisted with placement in other schools now that the Public Charter School Commission plans to revoke the school’s charter.

Charter schools are independently run under contracts with the state Charter School Commission and report to their own governing board rather than the Board of Education.

The state awarded Halau Lokahi $1.1 million annually in per-pupil funds for fiscal years 2013 and 2014, while Kamehameha Schools, which subsidizes Hawaiian-focused charter schools, awarded it $80,000. The funding was to assist 170 students.

During an audit of the school’s finances last year, Charter School Commission staff discovered the school’s financial records were incomplete and found "numerous transactions that appeared to be suspicious and possible theft" of public funds, court documents said.

The commission handed over to investigators a list of expenditures in the past two fiscal years totaling $101,873.23 for which the audit found there were either no supporting documents or justifiable reasons for the payments.

For example, Jewal Allbrett, founder Laara Allbrett’s daughter, was neither an employee nor contractor for the school, but was allegedly paid $11,747 for administrative duties, after-school care, information technology services and teacher support, according to Hanagami’s affidavit.

Payments totaling $6,760.70 were paid to Angela Kahealani, listed as a psychic healer on Kauai, who also had no contract with the school. Although school policies required that vendors be paid using school checks, "it appeared that Laara Allbrett concealed payments to Angela Kahealani by converting moneys from the account into U.S. Postal Service money orders," court documents said.

Records show the school also paid $21,347 to a Jamie McShane, who was not on staff or a contractor for the school. He allegedly was paid for services ranging from plumbing and public relations to office maintenance.

Hanagami, a certified fraud examiner, said he found multiple invoices characteristic of an internal false billing scheme. Invoices charging the school for various services — including $900 for office painting and $775.50 for clerical assistance — had the same generic format, font style and size, with "Mahalo Nui Loa!" printed at the bottom. None of the invoices had addresses where the payment was supposed to be sent.

The audit also found that while Halau Lokahi did not provide food services for students, $6,618 was spent on food supplies, including purchases from Costco, Sam’s Club, Foodland, Walmart and 7-Eleven.

"The purchases appeared to be for personal use by Laara Allbrett," court documents said.

Allbrett justified some of the questionable expenses to the commission staff. She said the $10,000 allegedly paid to Rainbow Healing Arts, for example, was for acupuncture services offered to the staff "for treatment to help them improve efficiency and effectiveness in the classroom," according to court documents. She said essential oils — highly concentrated aromatic plant oils — were purchased to help students focus and concentrate and improve attendance.

Allbrett said the school used essential oils "for years based on the reputation of the company as being one of the best in the world."

She told officials, for example, that a student who fell at school and hit his head "went from sobbing to laughing once oils were immediately applied, quelling his cries as he asked for more."

Another student, she said, was injured in a diving accident on Kahoolawe and was flown to Honolulu for treatment. Halau Lokahi staff met him and treated him with oils for his spinal injury and "he went from completely unable to use his right side of his body to fully functional within hours."

The oils also prevented a heart attack in one of the school’s "kupuna," she said.