Seth Andrew during a TEDx Talks

Source: TEDx Talks | YouTube

A man who served as an advisor in the Obama White House has been arrested on charges of scheming to steal $218,005 from a charter school network he founded, federal authorities said Tuesday.

Seth Andrew, 42, was arrested Tuesday morning in New York City, and is due to appear in court later in the day in Manhattan federal court.

Andrew is charged with wire fraud, money laundering, and making false statements to a financial institution, according to the U.S. Attorney’s Office for the Southern District of New York, which is prosecuting the case.

He is the founder of Democracy Prep Public Schools, which has operated schools in Harlem in New York City, and in Camden, New Jersey.

“As alleged, Seth Andrew abused his position as a founder of a charter school network to steal from the very same schools he helped create,” said U.S. Attorney Audrey Strauss.

“Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain a savings on a mortgage for a multimillion-dollar Manhattan apartment,” Strauss said.

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Andrew helped create Democracy Prep in 2005.

He accepted a job in the U.S. Department of Education in 2013, shortly after then-President Barack Obama took office, and then became a senior advisor in the Office of Educational Technology at the White House. 

Andrew is accused of ripping off the charter schools network in 2019, two years after severing ties from the network, by drawing funds from escrow accounts he had set up years before.

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He allegedly benefited from a lower interest rate on his $1.776 million mortgage as a result of having used stolen funds from the schools to maintain a large deposit in the bank that was loaning him the money to buy a $2.37 million home in New York.

“Locking into the lowest interest rate when applying for a loan is certainly the objective of every home buyer, but when you don’t have the necessary funds to put down, and you steal the money from your former employer to make up the difference, saving money in interest is likely to be the least of your concerns,” FBI Assistant Director William F. Sweeney Jr. said.

“We allege today that Andrew did just that, and since the employer he stole from was a charter school organization, the money he took belonged to an institution serving school-aged children,” he added. “Today Andrew himself is learning one of life’s most basic lessons – what doesn’t belong to you is not yours for the taking.”

This is breaking news. Check back for updates.



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