Harlem Charter School Founder Stole Over $200K, Feds Say

HARLEM, NY — The founder of a network of Harlem charter schools was arrested Tuesday amid accusations that he stole more than $200,000 from the organization, federal prosecutors announced.

Seth Andrew, 42, is the founder of Democracy Prep Public Schools, which began in 2005 and now operates 10 schools across Harlem, plus more in other states.

According to authorities, Andrew embezzled $218,005 from the network starting in 2019, using it to get a lower interest rate on a pricey Manhattan apartment.

He was set to appear later Tuesday in Manhattan federal court. He faces charges of wire fraud, money laundering and making false statements to a bank, and could spend decades in prison if convicted.

Democracy Prep called the allegations "a profound betrayal" in a message to families on Tuesday.

Fake bank accounts and a $2.3 million home

After presiding over Democracy Prep for eight years — and winning plaudits from the city's schools chancellor under Mayor Michael Bloomberg — Andrew left in 2013 to take a job as a senior adviser in the White House Office of Educational Technology, under President Barack Obama.

He formally severed his relationship with Democracy Prep in 2017, prosecutors said. Two years later, on March 28, 2019, Andrew walked into a New York City bank branch and closed two accounts originally opened by the school years earlier as part of an agreement with the state, prosecutors said.

After being handed two checks totaling more than $142,000 — made payable to the school — Andrew went to another bank branch in Manhattan, opened a business bank account in the school's name, and falsely said he was a "Key Executive with Control of" Democracy Prep, prosecutors claim.

He then deposited the first check into the new account, and, five days later, deposited the second check at an ATM in Baltimore, Md.

Investigators pinned Andrew to the transactions in part by reviewing surveillance footage which showed him wearing a yellow baseball cap — a signature part of his public image — inside a bank while closing one of the school's accounts, an FBI agent wrote in a complaint.

Meanwhile, Andrew was eyeing the new Manhattan apartment, and hoping to take advantage of a bank promotion that offered lower mortgage interest rates to customers with more than $250,000 in savings, prosecutors said. In April 2019, he purchased the $2.3 million apartment, using a $1.78 million bank loan with a lowered interest rate thanks to the promotion, authorities said.

Finally, in October 2019, Andrew closed a third bank account set up by the school and received a check worth more than $75,400, which he deposited into another fraudulent account at a third bank four days later, prosecutors said.

"A profound betrayal"

Andrew was arrested Tuesday morning in New York. The investigation into Andrew's finances was conducted by the FBI, while his prosecution is being handled by the Manhattan federal prosecutor's office.

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

In a Tuesday morning message to Democracy Prep families and alumni, the network's CEO called the alleged theft "a profound betrayal of all that we stand for and to you and your children, the scholars and families that we serve."

Democracy Prep alerted authorities after discovering the unauthorized transactions, said CEO Natasha Natasha Trivers, who has led Democracy Prep since 2019.

"To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way," Trivers wrote, adding that the school's finances "remain strong."