2022-01-14 DOJ SDNY press_release 118 KB 5,341 chars

Former White House Advisor Pleads Guilty To Devising A Scheme To Steal $218,000 From Charter Schools He Founded

Caption: United States v. Damian Williams, et al.

summary

Former White House advisor Seth Andrew pled guilty to wire fraud for stealing $218,000 from escrow accounts meant to protect charter school funds, laundering the money through fake accounts and a civic organization he controlled, and faces up to 20 years in prison with agreed restitution.

paragraph

Seth Andrew, a former White House advisor and co-founder of School Network-1, pled guilty to one count of wire fraud for stealing $218,000 from three escrow accounts established to safeguard funds in case the charter schools dissolved. After severing his official ties in 2017, he fraudulently closed the accounts between March and October 2019, misrepresenting himself as a key executive to open sham bank accounts and deposit the stolen checks, then consolidated the funds into a certificate of deposit that earned $2,083 in interest. Andrew ultimately concealed the money by transferring it to a civic organization he controlled and has agreed to pay full restitution; he faces a maximum 20-year sentence, with sentencing scheduled for April 14, 2022.

narrative

Seth Andrew, a former White House advisor and co-founder of School Network-1, pled guilty to wire fraud for orchestrating a scheme to steal $218,000 from escrow accounts established to protect funds in the event of charter school dissolution. Despite officially severing all ties with the schools in January 2017, Andrew fraudulently closed Escrow Account-1 and Escrow Account-2 on March 28, 2019, obtaining checks totaling $142,524.21, which he deposited into a fraudulent account opened under false pretenses at Bank-2. He later closed Escrow Account-3 on October 17, 2019, depositing a $75,481.10 check into a second fraudulent account, then consolidated all stolen funds into one account and rolled them into a certificate of deposit that earned $2,083.52 in interest. To conceal the origin of the money, Andrew transferred the matured CD funds into a bank account controlled by a civic organization he managed. He used deceptive emails and false claims of executive authority to open the fraudulent accounts, violating the charter agreements that restricted escrow access. Andrew has agreed to pay full restitution to the charter school network and faces a maximum 20-year prison sentence, with sentencing set for April 14, 2022, in Manhattan federal court.

Enriched metadata

Scheme: corporate-fraud (95%)
Court: Southern District of New York
Outcome: pleaded
Victim loss: $144,473

Classified corporate-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →

Extracted insights

Dollar amounts 6

$218K $218,000 $100K–$1M
$144K $144,473 $100K–$1M
$75K $75,481 $10K–$100K
$72K $71,881 $10K–$100K
$71K $70,642 $10K–$100K
$2K $2,083 <$10K

Entities 5

person damian williams
person judge john p. cronan
person seth andrew
scheme_term seth andrew pled guilty to wire fraud
scheme_term wire fraud

Triples 16

Seth Andrew pled guilty to Wire Fraud
Seth Andrew devised scheme to steal $218,000 From Charter Schools
Seth Andrew helped create School Network-1
Seth Andrew accepted job at United States Department Of Education
Seth Andrew served as Senior Advisor In Office Of Educational Technology At White House
Seth Andrew closed Escrow Account-1 And Escrow Account-2 On March 28, 2019
Seth Andrew received check Check-1 For $71,881.23
Seth Andrew received check Check-2 For $70,642.98
Seth Andrew opened Fraud Account-1 At Bank-2 On March 28, 2019
Seth Andrew deposited Check-1 Into Fraud Account-1
Seth Andrew deposited Check-2 Into Fraud Account-1 On April 2, 2019
Seth Andrew closed Escrow Account-3 On October 17, 2019
Seth Andrew received check Check-3 For $75,481.10
Seth Andrew deposited Check-3 Into Fraud Account-2 On October 21, 2019
Damian Williams announced Seth Andrew Pled Guilty To Wire Fraud
Judge John P. Cronan presided over Seth Andrew Guilty Plea In Manhattan Federal Court

View original DOJ press releasejustice.gov

Extracted body text (5,341c)

Press Release Former White House Advisor Pleads Guilty To Devising A Scheme To Steal $218,000 From Charter Schools He Founded Friday, January 14, 2022 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York 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. U.S. Attorney Damian 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.” 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. Mr. Williams praised the outstanding investigative work of the FBI. This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Ryan B. Finkel is in charge of the prosecution. Contact Nicholas Biase {212) 637-2600 Updated January 14, 2022 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 22-011

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