Ex-Obama White House Adviser Accused of Charter School Theft

(Bloomberg) -- A former Obama White House official was charged with stealing $218,000 from a charter school network he founded and using the money to get a lower rate on a mortgage for a Manhattan apartment.

Seth Andrew, who served as a senior adviser in the Office of Educational Technology during former President Barack Obama’s second term, stole the cash in 2019 from the charter network’s escrow accounts and deposited it in bank accounts he controlled, federal prosecutors said. He was then able to get a lower rate on a mortgage for an apartment that he and his spouse bought that year for $2.37 million, they said.

Andrew, 42, had ended his relationship with charter network two years earlier.

“Locking into the lowest interest rate when applying for a loan is certainly the objective of every home buyer,” William F. Sweeney Jr., assistant director of the FBI’s New York bureau, said in a statement. But not when “you steal the money from your former employer.”

Andrew was arrested Tuesday on charges of wire fraud, money laundering and making false statements to a financial institution, Manhattan U.S. Attorney Audrey Strauss said in a statement. His lawyer, Michael Yaeger, said he would plead not guilty. He was released by a judge on a $500,000 bond.

Democracy Prep

Prosecutors didn’t identify the charter network, but Harlem-based Democracy Prep Public Schools said it alerted law enforcement. Andrew started Democracy Prep in 2005 before joining the White House in 2013.

Andrew’s “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,” Democracy Prep Chief Executive Officer Natasha Trivers said in a note to parents. “To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way.”

She added, “The network’s finances remain strong.”

Andrew, a New York City native, led civic and education technology in the White House, according to a biography posted on the website of Washington Leadership Academy, a Washington-based charter high school he co-founded in 2013.

He began his career as a special education and English teacher in South Korea and Massachusetts, has degrees from Brown University and Harvard University, and is married to his college sweetheart, CBS News anchor Lana Zak, the biography says.

If convicted, Andrew faces as long as 30 years in prison for making false statements and 20 years on the other charges, although he’d likely get a much shorter term.

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