- A former Obama White House advisor was arrested over allegations he stole from charter schools he created.
- Prosecutors say Seth Andrew laundered money to get a discounted interest rate for a Manhattan mortgage.
- Andrew worked in the Office of Educational Technology at the White House until 2016.
- See more stories on Insider’s business page.
A former senior advisor in the Obama White House allegedly stole more than $200,000 from a charter school network he founded and tried to launder the stolen money in order to get a lower interest rate on a Manhattan apartment mortgage, according to the Department of Justice.
Seth Andrew, 42, who worked as a senior advisor in the Office of Educational Technology at the White House under Obama, was arrested and charged Tuesday with wire fraud, money laundering, and making false statements to a bank.
Andrew founded Democracy Prep Public Schools, a system of more than 20 New York City-based public charter schools in 2005, according to federal prosecutors. He left the network in 2013 to take a job at the US Department of Education before heading to the White House, where he stayed until November 2016.
In a criminal complaint unsealed Tuesday, prosecutors allege that between March and August 2019 Andrew, after cutting ties with Democracy Prep Public Schools in January 2017, used his former connection to the schools to steal $218,005 of the network’s reserve money by giving his school-affiliated email to a bank employee in an attempt to convince them he was still associated with Democracy Prep.
Prosecutors say Andrew drew funds from escrow accounts he had previously set up for individual schools within the charter school network. He then allegedly used that money to open a business account in the name of a Democracy Prep school at a bank.
According to the complaint, Andrew “attempted to conceal… the source of the stolen funds…and make it appear that the stolen funds belonged to a non-profit organization that Andrew founded, and currently appears to control.”
In a Tuesday email to Democracy Prep parents obtained by CNN, CEO Natasha Trivers said the charter school network alerted authorities as soon as it learned about the unauthorized withdrawals.
“Seth left our network in 2013. His alleged actions are a profound betrayal of all that we stand for and to you and your children, the scholars and families that we serve,” Trivers’ email reportedly said. “To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way.”
The alleged fraud, money laundering, and “misrepresentations” were all an attempt by Andrew to obtain savings on a mortgage for a multimillion-dollar Manhattan apartment, prosecutors said. Without the stolen Democracy Prep funds, prosecutors say Andrew would not have been able to take full advantage of the bank’s discounted interest rate promotion.
At a Tuesday appearance in court, a judge ordered Andrew released on a $500,000 personal recognizance bond according to CNBC.
An attorney for Andrew told the outlet he will plead not guilty.