Former Obama adviser pleads guilty to wire fraud and theft charges related to school funds

Seth Andrew, a former Obama administration adviser, just pled guilty to wire fraud and stealing over $200,000 from charter schools, Fox News reports

The guilty plea was reported by the Department of Justice’s (DOJ) Southern District of New York on Friday.

Damian Williams, the U.S. Attorney working on the case, released a statement, saying: “Seth Andrew, a former White House advisor, admitted today to devising a scheme to steal from the very same schools he helped create.  Andrew now faces time in federal prison for abusing his position and robbing those he promised to help.”

Andrew, according to the DOJ’s press release, in 2005, “helped create ‘School Network-1,’ a series of public charter schools then based in New York City.” In 2013, he left School Network-1 for the U.S. Department of Education and ended up becoming a senior advisor for Barack Obama’s Office of Educational Technology. In late 2016, he left that role, and, in early 2017, he officially ended his relationship with School Network-1.

What did he do?

School Network-1 has to maintain an escrow account, and that escrow account is only supposed to be able to be accessed if the school dissolves. Three such accounts were opened by Andrew, and other School Network-1 employees, at what the DOJ refers to as Bank-1, one in 2009, 2011, and 2013.

The DOJ reports:

After he severed his relationship with School Network-1, on March 28, 2019, ANDREW entered a Bank-1 branch in New York City and closed both Escrow Account-1 and Escrow Account-2.  Bank-1 provided ANDREW a bank check in the amount of $71,881.23 made payable to “[School Network-1] Charter School” (“Check-1”) and a second bank check in the amount of $70,642.98 to “[School Network-1] Harlem Charter” (“Check-2”).

Then, on the same day that Andrew closed those accounts, he went to another bank and opened a business bank account under the name “[School Network-1] Charter School.” In the process, according to the DOJ, “Andrew misrepresented to a Bank-2 employee that he was a ‘Key Executive with Control of’ School Network-1 Charter School and supported that misrepresentation with emails sent to the Bank-2 employee.”

The deposit

At this point, Andrew deposited Check-1 into the account, and about a week later he used an ATM in Baltimore, Maryland, to deposit Check-2 into the account. Then Andrew closed Escrow Account-3 and received Check 3, valued at over $75,000, which he deposited into an account at a third bank.

The DOJ press release continues:

Approximately one month later, ANDREW obtained a check from Bank-2 for $144,473.29, which constituted the funds stolen from Escrow Account-1 and Escrow Account-2, and ANDREW ultimately deposited those funds into Fraud Account-2.  Five days later, ANDREW rolled the funds in Fraud Account-2 into a certificate of deposit.  That certificate of deposit matured on May 20, 2020, which earned ANDREW $2,083.52 in interest.

ANDREW then transferred the funds from the certificate of deposit — including the funds stolen from the Escrow Accounts — into a bank account held in the name of a particular civic organization that ANDREW then-controlled thereby concealing the money’s association with School Network-1, and depositing the stolen money into an account under Andrew’s complete control.

After it was all said and done, Andrew managed to steal over $200,000 from the schools.

Looking ahead

Andrew is now facing 20 years in prison, and he has agreed to pay back the $218,000 that he stole. His sentencing is scheduled for April.

“I am truly sorry for what I have done,” Andrew told the judge. “What I did was wrong and I deeply regret my actions. And, as I stand before you today, I have tremendous remorse for the impact it has had on the schools, the alumni and my own family.”

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