Seth Andrew, a former Obama White House adviser, was arrested by federal authorities on Tuesday for allegedly stealing hundreds of thousands of dollars from a charter school network he created.
Andrews’ arrest was confirmed by the Department of Justice (DOJ) in a press release issued on Tuesday. Andrew is accused of wire fraud, money laundering, and making false claims to a financial institution in connection with a scheme that allegedly stole $218,005 from his charter school network.
“As alleged, Seth Andrew abused his position as a founder of a charter school network to steal from the very same schools he helped create,”
“Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain savings on a mortgage for a multimillion-dollar Manhattan apartment. Thanks to the FBI’s diligent work, Andrew now faces federal charges for his alleged scheme.” Manhattan U.S. Attorney Audrey Strauss said in a statement.
FBI Assistant Director William F. Sweeney Jr. added: “Locking into the lowest interest rate when applying for a loan is certainly the objective of every home buyer, but when you don’t have the necessary funds to put down, and you steal the money from your former employer to make up the difference, saving money in interest is likely to be the least of your concerns. We allege today that Andrew did just that, and since the employer, he stole from was a charter school organization, the money he took belonged to an institution serving school-aged children. Today Andrew himself is learning one of life’s most basic lessons – what doesn’t belong to you is not yours for the taking.”
Andrew worked as a top assistant to the Secretary of Education under former President Barack Obama, and then as a senior advisor in the White House Office of Educational Technology. Lana Zak, a CBS News anchor, is the former White House advisor’s wife.
In 2005, Andrew created Democracy Prep Public Schools, a network of charter schools with locations around the country. According to an email sent to workers in the aftermath of Andrew’s arrest and obtained by CNBC, he left the network in 2013.
“Seth left our network in 2013; his alleged actions are a profound betrayal of all that we stand for and to you and your children, the scholars and families that we serve. To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way.” Natasha Trivers, the new CEO of Democracy Prep, wrote about it.
“The network’s finances remain strong, and at no time did any of the activity by Seth Andrew have any adverse effect on our scholars or the functioning of our schools,” also Trivers added.
Andrew is accused of stealing from three escrow accounts for the charter school network, which were only meant to be reached if the network went down. According to the DOJ release, Andrew allegedly closed the accounts and removed the funds in part to buy a home in New York.
Andrew “is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of making a false statement to a bank, which carries a maximum sentence of 30 years in prison. The maximum potential sentences, in this case, are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge,” the DOJ release says.