Obama White House Adviser ARRESTED For Stealing Over $200,000 Dollars From Children Schools


Former White House senior adviser for the Obama administration Seth Andrew was charged Tuesday with wire fraud, money laundering, and making false statements to a financial institution, in connection with a scheme in which he allegedly stole $218,005 from a charter school network that he founded.

Andrew was arrested this morning in New York City.

Manhattan U.S. Attorney Audrey Strauss said: “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. 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. Thanks to the FBI’s diligent work, Andrew now faces federal charges for his alleged scheme.”

FBI Assistant Director William F. Sweeney Jr. said: “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. 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. Today Andrew himself is learning one of life’s most basic lessons – what doesn’t belong to you is not yours for the taking.”


In 2005, 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 adviser in the Office of Educational Technology at the White House. While employed at the Department of Education, and at the White House, Andrew was paid by School Network-1. 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 comprises several charter schools throughout United States including several in New York City. Pursuant to an agreement with the New York State Board of Regents, 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”). Check-1 and Check-2 represented the funds that were in Escrow Account-1 and Escrow Account-2, respectively.

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 represented to a Bank-2 employee that he was a “Key Executive with Control of” School Network-1 Charter School, which was a lie. He then deposited Check-1 into the account but, that day, Andrew did not deposit Check-2.

Five days later, on April 2, 2019, Andrew used an ATM machine in Baltimore, Maryland, to deposit Check-2 into Fraud Account-1. It appears Andrew waited to deposit Check-2 because it was made payable to “School Network-1 Harlem Charter” and not “School Network-1 Charter School.” Had he tried to deposit Check-2 when he opened Fraud Account-1 it would not have been honored by Bank-2.

At the time he deposited Check-1 and Check-2 into a Bank-2 bank account, Andrew was contemplating obtaining a mortgage from Bank-2 to purchase a residential property. At that time, Bank-2 offered certain customers, as a promotion, more favorable mortgage interest rates if those customers maintained a certain amount of funds in Bank-2 accounts. Specifically, for every $250,000 on deposit, up to a total of $1 million, Bank-2 would lower that qualifying customer’s mortgage interest rate by 0.125%. Thus, in total, if a qualifying customer maintained $1 million or more of his/her funds in Bank-2 accounts that customer would receive a 0.5% interest rate deduction on a Bank-2 mortgage. But to take advantage of the interest rate deduction promotion, Bank-2 required that the funds a customer deposited be funds owned by the customer or, in some instances, a business the customer owned, controlled or was lawfully associated with. Bank-2 did not permit a customer to utilize money owned by someone else to gain the benefit of the interest rate deduction promotion.

By April 2019, because of the $142,524 Andrew deposited in Bank-2, using the money he stole from two charter schools, Andrew deposited a total of approximately $1,007,716 with Bank-2, and therefore became eligible to receive a 0.5% interest rate deduction – the largest deduction a customer could receive from Bank-2’s promotion. Without the $142,524 deposited stolen funds, Andrew would have been eligible for only a 0.375% interest rate deduction. On August 21, 2019, Andrew purchased a residential property located in New York, New York, for approximately $2,368,000. To effectuate that purchase, ANDREW, and his spouse, obtained a mortgage from Bank-2 in the amount of $1,776,000 with an interest rate of 2.5% – taking full advantage of the promotion Bank-2 offered.

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 currently controls, thereby concealing the money’s association with School Network-1, and depositing the stolen money into an account under his complete control.

* * *

Andrew, 42, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of making a false statement to a bank, which carries a maximum sentence of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.




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