jedberg, you're not working at reddit anymore.. you have to use citations now in internet discussions. ;)
I don't think this is illegal, but many (most?) public school districts forbid their teachers from doing this.
In private schools, on the other hand, the practice is common. My 9th grade math teacher taught an after school SAT prep class, for example.
What law is this?
Unfortunately, even if illegal, there is a way around it. So what some of the teachers where I studied did (one of the eastern European countries) was to send her/his students to visit tutorial classes of the other teacher (for which you pay) and vice versa.