Former Obama White House adviser Seth Andrew pleads guilty to stealing $218,000 charter school

The founding father of a nationwide charter school community who as soon as served as a White House adviser beneath President Barack Obama has pleaded guilty to a cost alleging he stole $218,000 from the community to get a decrease rate of interest on a multimillion-dollar luxurious Manhattan condominium.

Seth Andrew, 42, a founding father of Democracy Prep, on Friday entered the plea in Manhattan federal courtroom to wire fraud, admitting that he moved cash in 2019 from the charter school community to different financial institution accounts with out authorization.

‘I’m actually sorry for what I’ve performed,’ Andrew informed Decide John P. Cronan. ‘What I did was mistaken and I deeply remorse my actions.’

‘And, as I stand earlier than you at the moment, I’ve large regret for the influence it has had on the colleges, the alumni and my circle of relatives.’

Andrew had additionally been charged final April with cash laundering and making a false assertion to a financial institution. He faces up to 20 years in jail at his scheduled April 14 sentencing, however will seemingly get a lot much less time.  

In 2005, Andrew was a founding father of Democracy Prep when it began in New York Metropolis. 

The school, which teaches largely lower-income individuals of coloration, helped increase take a look at scores for economically challenged kids in Harlem. It then expanded throughout the US. 

In spring 2013, Andrew left his position as a superintendent of the school’s community to work within the U.S. Division of Schooling and as a senior adviser within the Workplace of Instructional Know-how on the White House. The job lasted till November 2016.

Seth Andrew, 42, stole $218,000 from a charter school community he based so as to get a decrease rate of interest on a multi-million-dollar Manhattan condominium

Authorities stated Andrew closed three of the school’s financial institution accounts and deposited them into fraudulent accounts that he opened. This picture exhibits Andrew inside a financial institution when he was closing the third account in November 2019 

The money was used to buy a penthouse condominium at 370 Central Park West in Manhattan

The three bed room condominium has ‘with unimaginable entertaining area, a versatile format, and priceless vistas’ in accordance to a realtor itemizing

The $2 million condominium is positioned proper throughout the road from Central Park on the UWS

That is the condominium owned by Seth Andrew and his spouse Lana Zak at 370 Central Park West

When Andrew (left) stole the cash from the colleges, he and his spouse, Lana Zak (proper) had been ready to acquire a $1,776,000 mortgage with a low rate of interest of two.5 per cent 

In courtroom papers, authorities stated Andrew stole $218,000 from the colleges he helped create after which used the cash to acquire one of the best rate of interest his financial institution supplied on a mortgage for a $2 million Manhattan condominium he purchased together with his partner.

Prosecutors stated that in 2019, two years after severing ties with Democracy Prep, Andrew looted escrow accounts for the community’s faculties so he and his spouse may purchase the $2.37 million condominium positioned on dear Central Park West in Manhattan. 

The stolen cash helped Andrew qualify for a $1.78 million mortgage with a 2.5% rate of interest, a half-point discount and the most important his financial institution allowed, prosecutors stated. Andrew’s spouse, CBS Information anchor, Lana Zak, was not accused of wrongdoing. 

On March 28, 2019, authorities stated that Andrew closed two of the three of the school’s escrow accounts that had been to be accessed provided that the school dissolves.

For the primary closed account, obtained a financial institution verify within the quantity of $71,881.23 made payable to Democracy Prep Charter School. The second financial institution verify was for the quantity of $70,642.98 and was additionally made payable to Democracy Prep Harlem. 

Hardwood flooring run all through the condominium with an honest quantity of area for a desk

One of many three bedrooms of the condominium with gorgeous views of Central Park reverse

Regardless of the worth of the condominium, the kitchen is slender like many others in New York

Among the bedrooms are perfect for a research or dwelling workplace 

In courtroom papers, authorities stated Andrew tried to make it seem that the cash he took from the colleges (file picture) got here from a civic group he controls

On the identical day, Andrew entered a Manhattan financial institution and opened a enterprise checking account within the identify of Democracy Prep. 

To open that account, Andrew communicated to a financial institution worker that he was a ‘key govt with management of’ the charter school community, which ‘was a lie’. He deposited the $71,881.23 verify into the account however not the second. 

On April 2, 2019, Andrew used an ATM machine in Baltimore, Maryland, to deposit the second verify. Authorities stated it appeared that he ‘waited to deposit Verify-2 as a result of it was made payable to’ Democracy Prep Harlem and never Democracy Prep Charter School. 

Had he tried to deposit the second verify when he opened the ‘fraud account’ it could not have been honored by the financial institution, prosecutors stated. 

On October 17, 2019, Andrew closed the third escrow account and obtained a verify made payable to Democracy Prep Endurance within the quantity of $75,481.10, authorities stated. 

One of many escrow accounts that Andrew closed belonged to the Democracy Prep Harlem (file picture) and was within the quantity of $70,642.98

4 days later, he’s stated to have deposited that verify into an account that he opened at a unique financial institution.  

A few month later, Andrew obtained a verify for the entire of $144,473.29, which constituted the funds allegedly stolen from two of Democracy Prep’s escrow accounts. 

He then deposited these funds into the identical account the place the $75,481.10 was deposited. 

Inside the similar week Andrew rolled the funds within the account ‘right into a certificates of deposit’. 

‘That certificates of deposit matured on Could 20, 2020, which earned Andrew $2,083.52 in curiosity,’ the assertion reads. 

The assertion continued to say that he ‘then transferred the funds from the certificates of deposit – together with the funds stolen from the escrow accounts – right into a checking account held within the identify of a specific civic group that Andrew at present controls, thereby concealing the cash’s affiliation’ with Democracy Prep and depositing the stolen cash into an account beneath his ‘full management’.

Two years after severing ties with Democracy Prep, Andrew looted accounts for the community’s faculties so he and his spouse may purchase the $2.37 million condominium. The stolen cash helped Andrew qualify for a $1.78 million mortgage with a 2.5% rate of interest, a half-point discount

Andrew admitted that he tried to make it seem as if the cash he took from the colleges got here from a civic group he controls as he moved cash from the colleges community accounts to his private accounts and later to the nonprofit’s account from March to October of 2019.

He stated he informed financial institution workers he had authorization to switch the Democracy Prep funds when he didn’t.

In a launch, U.S. Legal professional Damian Williams stated ‘Andrew, a former White House adviser, admitted at the moment to devising a scheme to steal from the exact same faculties he helped create.’

He added: ‘Andrew now faces time in federal jail for abusing his place and robbing these he promised to assist.’

Protection attorneys Tim Doherty and Edward Kim stated in a press release that Andrew for over twenty years ‘has labored tirelessly to increase academic, democratic, and technological alternative to disenfranchised communities around the globe.’

Andrew based Democracy Prep in 2005 becoming a member of Division of Schooling in 2013, turning into a senior adviser in Obama’s White House’s Workplace of Instructional Know-how

‘Seth’s life has at all times been motivated by a civic mission and he deeply regrets his previous errors. He has, with braveness, accepted duty for them,’ his lawyer, Edward Kim, stated in a press release. ‘With the assistance and help of his household and family members, Seth seems to be ahead to deepening his dedication to service and innovation within the subsequent chapter of his life.

‘For greater than twenty years, Seth Andrew has labored tirelessly to increase academic, democratic, and technological alternative to disenfranchised communities around the globe. He deeply regrets his previous errors. He has, with braveness, accepted duty for them.’  

Andrew has agreed to pay the whole $218,000 again to the Charter School Community.

Democracy Prep now operates 24 faculties with greater than 7,000 college students in New York, New Jersey, Louisiana, Nevada and Texas. 

It has known as Andrew’s unauthorized withdrawals “a profound betrayal.” 

His sentencing is scheduled for April 14, when he faces up to 20 years in jail, though prosecutors and protection attorneys agreed in a written plea deal {that a} sentence starting from 21 to 27 months in jail was acceptable.