Ex-Obama adviser admits stealing $218,000 from schools for mortgage on NYC apartment

Seth Andrew, a former White House adviser under President Barack Obama and founder of a network of charter schools, pleaded guilty to a wire fraud charge in New York on Friday after allegations he stole 218,000 $ to schools to get the best interest rate. on a mortgage for an apartment in 2019.

“Seth Andrew, a former White House adviser, today admitted to having hatched a scheme to steal from the same schools he helped create,” U.S. Attorney Damian Williams said in a press release. . “Andrew now faces federal prison for abusing his position and stealing from those he promised to help.”

Andrew, 42, helped found Democracy Prep in 2005, according to The Associated Press. She opened her first school in Harlem in 2006.

Following the success of increasing test scores in the school, Democracy Prep grew in subsequent years and currently operates 24 schools in New York, New Jersey, Baton Rouge, Las Vegas and San Antonio, according to the website. Democracy Prep.

Earlier court documents say Andrew left the organization in 2013, accepting a position with the US Department of Education. He later became a senior adviser in the White House Office of Educational Technology, a position he held until November 2016. In January 2017, Andrew ended his official relationship with Democracy Prep.

New York’s Democracy Prep schools were required to maintain “escrow accounts,” according to the Justice Department press release, to which access is only permitted in the event of a school closure.

The U.S. currency is pictured October 14, 2004 in Washington, DC. Seth Andrew pleaded guilty on Friday to stealing more than $200,000 from the school system he helped found.
Alex Wong/Getty Images

Andrew was a signatory to all three open accounts belonging to the school. The criminal complaint alleges that in March 2019, he closed two of the accounts while claiming he had the authority to do so, which he did not do as he was no longer involved with schools and schools were not dissolved.

On the same day, he reportedly opened an account with another bank, depositing one of the checks received when closing an account that amounted to approximately $70,000. A few days later, he deposited the second check for a similar amount at an ATM.

Andrew and his wife, who have not been charged, allegedly deposited the money in August 2019 to take advantage of a bank promotion that reduced interest rates and used the reduced rate on a mortgage for a 2 bedroom apartment million in Manhattan, according to the New York Times.

In October 2019, the complaint alleges he closed the third escrow account and opened another account with the third check, which was for approximately $75,000.

Andrew apologized for his actions in court on Friday, acknowledging the harm the case has caused the school and his family, according to the AP.

“Seth’s life has always been driven by a civic mission and he deeply regrets his past mistakes. He courageously accepted responsibility for them,” defense attorneys Tim Doherty and Edward Kim said in a statement to the AP. . “With the help and support of his family and loved ones, Seth looks forward to deepening his commitment to service and innovation in the next chapter of his life.”

The AP also reported that Andrew had agreed to pay $218,000 in restitution to the schools and faces a maximum sentence of 20 years in prison at a sentencing hearing scheduled for April 14. However, prosecutors and the defense reportedly agreed in Andrew’s plea deal that a sentence of 21 to 27 months was appropriate.

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