Damien Williams, the United States Attorney for the Southern District of New York, announced that SETH ANDREW pleaded guilty today to wire fraud, before U.S. District Judge John B. Cronan, in Manhattan Federal Court.
US Attorney Damian Williams said: “Seth Andrew, a former White House counsel, today admitted to plotting a robbery from the same schools he helped create. Andrew now faces a term in federal prison for abusing his position and stealing from whom he promised to help.”
As per previous filings in this case:
In 2005, SETH ANDREW helped create “School Network-1,” a chain of charter public schools then based in New York City. In the spring of 2013, Andrew left School Network-1 and accepted a job at the US Department of Education and, later, as a senior advisor in the White House Office of Education Technology. In November 2016, Andrew left his role in the White House, and shortly thereafter, in January 2017, Andrew officially broke off his relationship with School Network-1.
New York-based School Network-1 charter schools must maintain an “escrow account” that can only be accessed if the school is dissolved. Three such escrow accounts, for three School Network-1 schools in New York City, were opened by ANDREW and other School Network-1 employees, in “Bank-1” in 2009, 2011 and 2013. With respect to each of these three accounts ‑- Escrow Account-1, Escrow Account-2 and Escrow Account-3- ANDREW was one of the signatories and had access to the funds in it. However, according to the charter agreement, the funds were held in escrow accounts in the event the school was dissolved, and the funds could not be transferred by ANDREW, or anyone, without proper authorization.
After he severed ties with School Network-1, on March 28, 2019, ANDREW entered the New York City branch of Bank-1 and closed the Escrow Account-1 and Escrow Account-2. Bank-1 presented ANDREW a bank check for $71,881.23 payable to “[School Network-1] Charter School” (“cheque-1”) and a second bank check for $70,642.98 to”[School Network-1] Harlem Charter” (“Choice 2”).
On the same day that ANDREW closed Escrow Account 1 and Escrow Account 2, ANDREW entered the Manhattan branch of a different insured FDIC bank (“Bank-2”) and opened a commercial bank account in the name of[School Network-1] Charter School” (“a fraud account ‑1”). To open this account, ANDREW abused a Bank-2 employee that he was a “key CEO controlling” School Network-1 Charter School and supported this misrepresentation through emails sent to the Bank-2 employee. 2. ANDREW then deposited check #1 into the account.Five days later, on April 2, 2019, ANDREW used an automated teller machine in Baltimore, Maryland to deposit check2 into the fraud account-1.
On October 17, 2019, ANDREW closed Escrow Account 3 and received a check (“Cheque 3”) payable to “[School Network-1] Endurance” in the amount of $75,481.10. On October 21, 2019, ANDREW deposited Check 3 into an account he opened in a third bank (“Fraud Account-2”).
About one month later, ANDREW obtained a check from Bank-2 for $144,473.29, which constitutes the money stolen from Escrow Account 1 and Escrow Account 2, and ANDREW eventually deposited this money into Fraud Account 2. Five days later, ANDREW transferred the funds In fraud account -2 to the certificate of deposit. This Certificate of Deposit matured on May 20, 2020, which generated ANDREW interest $2,083.52. ANDREW then transferred funds from the Certificate of Deposit – including money stolen from escrow accounts – to a bank account in the name of a particular civic organization that ANDREW then controlled and thus concealed the funds’ link to School Network-1, and deposited the stolen funds into an account under Andrew’s control. full.
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Andrew, 42, has pleaded guilty to one count of electronic fraud, which carries a maximum penalty of 20 years in prison. Andrew agreed to pay compensation to the charter school network from which he stole. Andrew is scheduled to be sentenced before Judge Cronan on April 14, 2022.
Mr. Williams commended the FBI’s outstanding investigation work.
This case is being handled by the Office’s Complex Fraud and Cybercrime Unit. Assistant United States Attorney Ryan B. Finkel is responsible for the prosecution.