Federal authorities arrested former Obama White House advisor Seth Andrew on Tuesday for allegedly stealing hundreds of thousands of dollars from a charter school network he founded.
The Department of Justice (DOJ) announced Andrews’s arrest in a Tuesday press release. Andrew is facing charges of wire fraud, money laundering, and making false statements to a financial institution related to a scheme stealing $218,005 from his network of charter schools.
“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,” Manhattan U.S. Attorney Audrey Strauss said in a statement. “Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain a 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.”
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.”
Under former President Barack Obama, Andrew served as a top adviser to the secretary of Education, and later as a senior advisor in the White House Office of Educational Technology. The former White House advisor is married to CBS News anchor Lana Zak.
Andrew founded Democracy Prep Public Schools, a network of charter schools with branches in several states, in 2005. He left the network in 2013, according to an email sent to staff in the wake of Andrew’s arrest and obtained by CNBC.
“Seth left our network in 2013,” wrote Natasha Trivers, current CEO of Democracy Prep. “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.”
“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,” Trivers added.
Andrew allegedly stole out of three escrow accounts for the charter school network that were only supposed to be accessed should the network fail. Andrew allegedly closed out the accounts and withdrew the funds in part to buy a residence in New York, according to the DOJ release.
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.