Seth Andrew during a TEDx conversation
Source: TEDx talks | Youtube
Seth Andrew, who served as an education advisor in the Obama White House, was arrested Tuesday morning for allegedly stealing $ 218,005 from a public charter school network he founded.
Andrew, 42, was arrested in New York City and is due to appear in federal court in Manhattan later the day.
Andrew, who founded Democracy Prep Public Schools in 2005, is accused of using more than half of the money allegedly stolen from that network to maintain a bank balance that gave him a cheaper rate on his mortgage.
Andrew, who is married to CBS news anchor Lana Zak, is facing charges of wire fraud, money laundering and misrepresentation against a financial institution, according to the Southern New York District Attorney tracking the case.
Zak, who has three children with Andrew, did not immediately respond to a request for comment.
Andrew’s criminal defense attorney Michael Yaeger told CNBC that Andrew “will make a pledge today not to be guilty”.
Natasha Trivers, the current CEO of Democracy Prep, said in an email to the network’s families, alumni, and academics that a “set of financial safeguards” put in place after she took up her post in 2019 were straight to discovery resulted from Seth’s unauthorized withdrawals. “
Democracy Prep then notified the authorities and cooperated with the criminal investigation, she said.
“Seth left our network in 2013,” wrote Trivers. “His alleged actions are a profound betrayal of all we stand for and of you and your children, the scholars and families we serve. To put it bluntly, the alleged crimes never presented any risk to our students, staff or operations represent in some way. “
Trivers added, “The network’s finances remain strong and at no point has any of Seth Andrew’s activities had a negative impact on our scholars or the functioning of our schools.”
Democracy Prep operates schools in the Bronx and Harlem, New York City, as well as Camden, New Jersey, Las Vegas, San Antonio and Baton Rouge. Last week Andrew retweeted a Twitter post from Democracy Prep saying the network was looking for “an amazing team of teachers, leaders, and staff who want to develop responsible civic scholars!”
Andrew is currently the CEO of Democracy Builders, which calls itself “the social sector studio, the more than $ 1 billion company that started changing the face of education, democracy and technology around the world “. This organization bought the former campus of Marlboro College in Marlboro, Vermont for $ 1.725 million last year with the aim of building a school there called Degrees of Freedom.
Andrew’s co-founder at Democracy Builders did not immediately respond to a request for comment.
US attorney Audrey Strauss said in a statement: “Seth Andrew abused his position as the founder of a charter school network to steal from the same schools he helped build.”
“Andrew allegedly not only stole the schools’ money, but also used the stolen funds to save a mortgage on a multi-million dollar apartment in Manhattan,” said Strauss.
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Andrew helped create Democracy Prep in 2005.
He accepted a position at the U.S. Department of Education in 2013 shortly after then-President Barack Obama began his second term, and then became a senior advisor in the White House’s educational technology office.
Andrew is accused in a complaint of tearing down the network of charter schools in 2019 – two years after disconnecting from the network – by withdrawing funds from escrow accounts he had set up years earlier for individual schools in the network, and much of it of the money deposited into a bank from which he wanted to get a mortgage.
He reportedly benefited from a lower interest rate on his $ 1.776 million mortgage for using stolen funds from the schools to hold a large deposit in the bank that gave him the money to buy a house in New York for $ 2.37 million.
Andrew and his wife, who are not under the scheme, received a mortgage rate of only 2.5% or 0.5% less than they should have paid because they had more than $ 1 million on deposit with the lender.
“Without the deposited stolen funds amounting to US $ 142,524, Andrew would only have received an interest deduction of 0.375%,” the US attorney general stated.
FBI Assistant Director William F. Sweeney Jr. said in a statement: “Getting the lowest interest rate on when applying for a loan is certainly the goal of every homebuyer, but when you do not have the funds to pay and you steal the money from your previous employer to make up the difference. Saving on interest money is probably the least of your concerns. “
“We claim 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-age children,” he added added. “Today Andrew is learning one of the most basic lessons in life himself – what is not yours is not yours.”
A CBS News spokeswoman did not immediately return messages asking for comments on Zak.