Seth Andrew, who served as an education advisor in the Obama White House, was arrested Tuesday morning on charges of scheming to steal $218,005 from a public charter school network that he founded, federal authorities said.
Andrew, 42, was busted in New York City, where he and his wife, CBS News anchor Lana Zak, have a residence valued at more than $2 million.
The founder of Democracy Prep Public Schools is accused of using more than half of the allegedly stolen money from that network to maintain a bank account minimum that gave him a more favorable interest rate for a mortgage on his and Zak’s Manhattan residence. Zak was not charged in the case.
Prosecutors said Andrew in 2019 — more than two years after severing ties with Democracy Prep — looted a series of escrow accounts he had previously set up for individual schools within Democracy Prep’s network, and then used their funds to open a business account in the name of one of the schools at a bank.
A surveillance photo from a bank, which was included in a criminal complaint, show Andrew at that bank, where he was closing one of the schools’ escrow account there in October 2019.
Andrew is seen in that photo wearing a yellow hat, which an FBI agent noted in the complaint “is essentially Andrew’s ‘calling card,’” as it signifies a connection to Democracy Prep “and his leadership of it.”
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.
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SOURCE: CNBC, Dan Mangan
