Former Obama White Home adviser Seth Andrew was arrested for theft of a constitution college

Seth Andrew during a TEDx conversation

Source: TEDx talks | Youtube

Seth Andrew, who served as the Obama White House education advisor, was arrested Tuesday morning for allegedly stealing $ 218,005 from a public charter school network he founded.

Andrew, 42, was blown up in New York City, where he and his wife, CBS news anchor Lana Zak, have a home worth more than $ 2 million. He is due to appear in federal court in Manhattan later the day.

The founder of Democracy Prep Public Schools is charged with using more than half of the money allegedly stolen from this network to maintain a bank balance that gave him a cheaper rate on a mortgage on his and Zak’s Manhattan residence. Zak was not charged in the case.

Prosecutors said in 2019 – more than two years after breaking ties with Democracy Prep – Andrew looted a series of escrow accounts he had previously set up for individual schools on Democracy Prep’s network, and then used their funds to open a business account on behalf of them von opens one of the schools at a bank.

A bank surveillance photo that was included in a criminal complaint shows Andrew at that bank closing one of the schools’ escrow accounts in October 2019.

Andrew is seen in this photo wearing a yellow hat, which an FBI agent referred to in the complaint as “essentially Andrew’s” calling card “” as it implies a connection to Democracy Prep “and its leadership.”

Andrew is charged with wire fraud, money laundering, and misrepresentation against a financial institution, according to the New York Southern District Attorney’s office prosecuting 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”.

Arne Duncan, who oversaw then-President Barack Obama’s education minister Andrew, declined to comment on the criminal case.

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 Withdrawals from Seth’s trespassers. “

Democracy Prep, which Andrew founded in 2005, then notified the authorities and worked 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, Louisiana.

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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While at Democracy Prep, Andrew accepted a position at the Department of Education in 2013, shortly after Obama began his second term. He then became a senior advisor in the Education Technology Bureau at the White House.

During his tenure in the Obama administration, Andrew continued to be paid by Democracy Prep, according to authorities. In January 2017, the same month that Obama stepped down, he severed ties with the network.

Andrew is accused in a complaint of tearing down the network of charter schools in 2019 by withdrawing money from escrow accounts he set up years ago for individual schools on the network and depositing much of the money with a bank that he wanted to get mortgage from.

He allegedly benefited from a lower interest rate on his $ 1.776 million mortgage for using stolen funds from schools to put a large deposit with the bank that gave him the money to buy a house in New York for $ 2.37 million.

Andrew and his wife 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 of $ 142,524, Andrew would only have received an interest deduction of 0.375%,” the US law firm 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 that serves school-age children,” added Sweeney added. “Today Andrew is learning one of the most basic lessons in life himself – what is not yours is not yours.”

A spokeswoman for CBS News had no immediate comment on Zak and the case.

Correction: President Barack Obama began his second term in 2013. An earlier version misplaced the timing.