Seth Andrew, a former White House adviser during the Obama administration, has recently been arrested by the FBI, which accused him of stealing $218,000 in public funds from the charter school he helped create.
Andrew, 42, served as a senior adviser to the Office of Educational Technology under former President Barack Obama. He was arrested in connection with wire fraud, money laundering and making false statements to financial institutions. Federal prosecutors say he deposited more than half of the stolen money into bank accounts, maintaining higher balances that allowed him to get better interest rates for the mortgage on his multimillion-dollar apartment in Manhattan.
“As alleged, Andrews abused his position as a charter school founder to steal from those schools he helped create,” said Manhattan U.S. Attorney Audrey Strauss.
“Andrews is accused of not only stealing funds from the schools, but also of using the stolen funds to obtain savings on the mortgage of a multi-million dollar apartment in Manhattan.” She added, “As a result of the FBI’s investigative efforts, Andrews now faces federal charges for his alleged crimes.”
Andrews’ attorney, Michael Yaeger, told via email that Andrews will plead not guilty in Manhattan federal court and that “Seth will plead not guilty and we are reviewing the documents that were just unsealed this morning.”
Andrews is reportedly the founder of a prominent New York charter school chain. The school, called Democracy Prep, was founded in 2005. The school chain now operates 21 schools across the country, providing tutoring for 6,500 students.
According to CNBC, the school’s CEO, Natasha Trivers, wrote to families and students that “a series of financial safeguards” she took after taking over as CEO in 2019 led directly to “the discovery of unauthorized withdrawals by Seth “
“Seth left our institution in 2013,” said Trivers, “and what he is accused of doing is a profound betrayal of everything we stand for and of you and your children, scholars and families we serve. To be clear, though, at no time did his alleged crimes pose any risk to our students, staff or operations.”
She added, “The financial position of the school chain remains strong at this time, and at no time did any of Andrew’s activities have any adverse impact on our students or the operations of our schools.”
FBI Assistant Director Sweeney in New York said, “Locking in the lowest interest rate when applying for a loan is certainly every homebuyer’s goal, but when you don’t have enough money for a down payment and instead steal money from your former employer to make up the difference, the interest savings (compared to the crime committed) is probably the least of your concerns.”