A former White House senior adviser for the Obama administration who helped found a network of charter schools is accused of allegedly stealing hundreds of thousands of dollars from the schools and attempting to launder the funds in order to get a lower interest rate on a mortgage for a Manhattan apartment, according to federal prosecutors.
Seth Andrew was charged by prosecutors in the US Attorney’s Office for the Southern District of New York with wire fraud, money laundering, and making false statements to a bank.
Prosecutors say Andrew helped create a network of charter schools based in New York City in 2005, and left the network in 2013 for a job at the US Department of Education, and later became a senior adviser in the Office of Educational Technology at the White House, where he continued to be paid by the charter school network. Prosecutors say Andrew left his role in the White House in November 2016 and cut ties with the school network in January 2017.
Andrew was taken into custody Tuesday in Manhattan and released on a personal recognizance bond after an initial appearance, SDNY spokesman James Margolin said. Andrew’s attorney, Michael Yaeger, said Andrew will plead not guilty and is reviewing the government’s case. No plea was entered Tuesday, Margolin said.
Andrew was the founder of Democracy Prep Public Schools, a network of more than 20 public charter schools from Harlem to Washington, DC, according to an email sent to Democracy Prep families and alumni Tuesday morning that was released to CNN.
CEO Natasha Trivers said that Democracy Prep alerted the appropriate authorities once it learned about the unauthorized withdrawals.
“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,” Trivers’ email said. “To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way.”
Trivers also added that the activity did not have “any adverse effect on our scholars or the functioning of our schools” and that the school system has since instituted financial safeguards, which lead to the discovery of the withdrawals.
According to a criminal complaint filed on April 20 and unsealed Tuesday, prosecutors allege that between March and August of 2019, Andrew used his former association with the network of schools to allegedly steal $218,005 of the school’s reserve money by using his email address affiliated with the schools to email a bank employee and convince them that he was still associated with the school, which he was not.
The complaint states that after allegedly stealing the school network’s money, Andrew “attempted to conceal the source of the stolen funds … and make it appear that the stolen funds belonged to a non-profit organization that Andrew founded, and currently appears to control.”
Prosecutors allege Andrew misrepresented that he “lawfully controlled” the money in order to obtain a discounted mortgage interest rate to buy an apartment in Manhattan.
This story has been updated with additional reporting.