A former adviser to Barack Obama is facing 20 years in prison after pleading guilty to a wire fraud scheme to steal over $200,000 from charter schools that he helped found.
Seth Andrew became the second former Obama administration official to plead guilty to fraud on Friday alone.
Obama’s former Department of Homeland Security Inspector General Charles K. Edwards also pleaded guilty to defrauding the US government on Friday too.
Andrew came clean to the judge in his case about the scheme to steal from the schools, saying: “I am truly sorry for what I have done.
“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.”
The Department of Justice (DOJ) broke down the scheme in a detailed statement that said: “Damian Williams, the United States Attorney for the Southern District of New York, announced that SETH ANDREW pled guilty today to wire fraud, before United States District Judge John P. Cronan, in Manhattan federal court.
Williams said: “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.”
The DOJ report continues:
“According to previous filings in this case: In 2005, SETH ANDREW helped create ‘School Network-1,’ a series of public charter schools then based in New York City. In the Spring of 2013, ANDREW left School Network-1 and accepted a job in the United States Department of Education and, thereafter, as a senior advisor in the Office of Educational Technology at the White House. In November 2016, ANDREW left his role in the White House and, shortly thereafter, in January 2017, ANDREW officially severed his relationship with School Network-1.
“School Network-1’s New York based charter schools must maintain an ‘escrow account’ that may be accessed only if the school dissolves. Three such escrow accounts, for three New York City based-School Network-1 schools, were opened by ANDREW and other School Network-1 employees, at ‘Bank-1’ in 2009, 2011 and 2013. As to each of those three accounts ‑- Escrow Account-1, Escrow Account-2 and Escrow Account-3 — ANDREW was a signatory and had access to the funds in them.
“However, pursuant to the charter agreement, the funds in the Escrow Accounts were reserved in case the school dissolved, and the funds could not be moved by ANDREW, or anyone, without proper authorization.
“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’).
“The same day that ANDREW closed Escrow Account-1 and Escrow Account-2, ANDREW entered a Manhattan branch of a different FDIC insured bank (‘Bank-2’) and opened a business bank account in the name of ‘[School Network-1] Charter School’ (‘Fraud Account‑1’).
“To open that account, 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. ANDREW then deposited Check-1 into the account. Five days later, on April 2, 2019, ANDREW used an ATM machine in Baltimore, Maryland to deposit Check-2 into Fraud Account‑1.
“On October 17, 2019, ANDREW closed out Escrow Account-3 and received a check (‘Check-3’) made payable to ‘[School Network-1] Endurance’ in the amount of $75,481.10. On October 21, 2019, ANDREW deposited Check-3 into an account that he opened at a third bank (‘Fraud Account-2’).
“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.
“ANDREW, 42, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. ANDREW has agreed to pay restitution to the Charter School Network from which he stole. ANDREW is scheduled to be sentenced before Judge Cronan on April 14, 2022,” DOJ wrote.
On Friday, Charles K. Edwards, 61, who served in the Obama administration as the Acting Inspector General for the Department of Homeland Security between February 2008 until December 2013 plead guilty to conspiring to defraud the United States government.