Former Obama adviser arrested on suspicion of stealing $218k from charter schools he founded

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A former adviser to the Obama White House was arrested on allegations of stealing from a charter school he founded, according to the Department of Justice.

Federal prosecutors announced on Tuesday that Seth Andrew had been arrested on charges of wire fraud, money laundering, and making false statements to a bank in connection to $218,005 allegedly stolen from Democracy Prep Public Schools.

Defence attorney Michael Yaeger said Mr Andrew would plead not guilty and was reviewing the government’s case, according to CNBC.

Mr Andrew, 42, served in the Office of Educational Technology during the second term of the Obama administration from 2013 to 2016, according to the Justice Department.

Prosecutors also allege that Mr Andrew, who founded the charter school network in 2005, used the stolen funds to obtain savings on a mortgage for a $2m Manhattan apartment in 2019.

The criminal complaint alleges that between March and August 2019, Mr Andrew used his past association with Democracy Prep to access escrow accounts he previously established for schools in the network.

FBI assistant director William Sweeny Jr alleged in a statement that Mr Andrew used the funds to lock in a low-interest rate when applying for a loan.

“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,” Mr Sweeny said.

Democracy Prep CEO Natasha Trivers said in an email to school families that Mr Andrews left the network in 2013 and a series of "financial safeguards" implemented in 2019 led to the discovery of unauthorised withdrawals.

"His 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," Ms Trivers’ email said, according to CNN.

"To be clear, at no time did the alleged crimes pose any risk to our students, staff or operations in any way."

At a US District Court appearance in Manhattan, Mr Andrew was released on a personal recognizance bond to appear in court on 27 May.