Former Obama Admin Charged For STEALING Thousands From School System

The Department of Justice has filed charges against Obama White House adviser Seth Andrew for the theft of $218,000 from a charter school he founded. Andrew used the funds he stole to lower the interest rate on a luxury apartment in Manhattan.

In 2005, Andrew established “School Network-1,” a series of charter schools based in New York City. He began work for the Obama administration’s Department of Education back in 2013 and eventually became the senior adviser of the Office of Educational Technology at the White House.

Andrew allegedly continued to receive paychecks from School Network-1 between the spring of 2013 and January 2017. After leaving his post at the White House in November 2016, he quickly ended his relationship with School Network-1 the following January.

According to the Justice Department, Andrew pulled funds out of all three escrow accounts, without any preauthorization, in March of 2019. The escrow accounts were designed to only be emptied if School Network-1 dissolved.

When he cashed those escrow accounts, he was provided with two checks, prosecutors say. One was for the amount of $71,881.23, the other two for $70,642.98. The checks were made out to two different charter schools.

Andrew allegedly created a fraudulent business account at another bank, where he deposited the checks days apart. The bank that Andrew deposited the check was offering special incentives and interest rates for keeping a particular amount in their accounts. At this time Andrew was looking for a new mortgage rate according to prosecutors.

“Specifically, for every $250,000 on deposit, up to a total of $1 million, [the new bank] 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 [the new bank] accounts that customer would receive a 0.5% interest rate deduction on a … mortgage,” a press release explained. “But to take advantage of the interest rate deduction promotion, [the new bank] 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. [The new bank] did not permit a customer to utilize money owned by someone else to gain the benefit of the interest rate deduction promotion.”

The stolen funds, prosecutors claim, made a drastic difference in the interest rate. Without the more than $142,000 in stolen funds, Andrew’s interest rate would have been 0.375% higher. Because of the funds, the former Obama official was able to obtain a $1.77 million loan with an interest rate of 2.5%.

Andrew allegedly took the funds, along with more than $2,000 in interest, and rolled them into a deposit certificate, which was then transferred to a bank account under another organization’s name. The move, prosecutors state, was to “conceal the money’s association with School Network-1.”

“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,” Manhattan U.S. Attorney Audrey Strauss said in a statement. “Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain 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.”

Andrew’s wife, who co-signed on the loan, is CBS News anchor Lana Zak.

Andrew is facing charges of wire fraud, money laundering, and making false statements to a financial institution. It is unclear if Andrew’s wife will also face charges.