Ex-Obama Adviser Admits to Stealing $218K From Schools for Mortgage on NYC Apartment

Seth Andrew Democracy Prep Stolen Money $200,000
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Seth Andrew, a former White House counsel under Barack Obama and founder of a network of charter schools, pleaded guilty to internet fraud in New York Friday after allegations he stole $218,000 from schools to get the best interest rate. On a mortgage for an apartment in 2019.

“Seth Andrew, a former White House counsel, today admitted to plotting a robbery from the same schools he helped create,” US Attorney Damian Williams said in a press release. “Andrew now faces a sentence in federal prison for misusing his position and robbing those he promised to help.”

Andrew, 42, helped found Democracy Prep in 2005, according to the Associated Press. She opened her first school in Harlem in 2006.

After successfully increasing the school’s test scores, Democracy Prep expanded in the following years and currently operates 24 schools in New York, New Jersey, Baton Rouge, Las Vegas and San Antonio, according to the Democracy Prep website.

Previous court notes indicate that Andrew left the organization in 2013, accepting a position with the US Department of Education. Subsequently, he became a senior advisor in the Office of Education Technology at the White House, a position he held until November 2016. In January 2017, Andrew terminated his official relationship with Democratic Prep.

Democracy prep schools in New York have been required to maintain “escrow accounts,” according to the Justice Department’s press release, access to which is only allowed if the school is closed.

Seth Andrew Democratic Prep. $200,000 stolen money
The US coin was photographed on October 14, 2004 in Washington, DC. Seth Andrew pleaded guilty Friday to stealing more than $200,000 from the school network he helped found.
Alex Wong / Getty Images

Andrew was one of the signatories to the three open accounts belonging to the school. The March 2019 criminal complaint alleges that he closed two accounts he claimed had the authority to do so, which he did not do because he was no longer involved with the schools and the schools were not dissolved.

It was alleged that on the same day he opened an account with another bank, and deposited one of the checks he received when closing one account amounting to about $70,000. Days later, he deposited a second check for a similar amount from an ATM.

Andrew and his wife, who have not been charged, allegedly deposited the money in August 2019 to take advantage of a bank promotion that lowered interest rates, and used the discounted rate on a $2 million Manhattan apartment mortgage, according to the New York Times. .

In October of 2019, the complaint alleged that he closed the third escrow account and opened another account with the third check, which was worth about $75,000.

Andrew apologized for his actions in court Friday, acknowledging the damage done to the school and his family, according to the Associated Press.

“Seth’s life has always been driven by a civilian mission and he deeply regrets his past mistakes. He has courageously accepted responsibility for them,” defense attorneys Tim Doherty and Edward Kim said in a statement to The Associated Press. “With the help and support of his family and loved ones, Seth looks forward to deepening his commitment to service and innovation in the next chapter of his life.”

The Associated Press also reported that Andrew has agreed to pay $218,000 in compensation to the schools, and faces a maximum sentence of 20 years in prison at his sentencing hearing scheduled for April 14. A sentence of 21 to 27 months was appropriate.

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