Harlem Charter School Founder Sentenced To Prison For Stealing $200K

HARLEM, NY — The founder of a network of Harlem charter schools who admitted to stealing more than $200,000 from the organization has been sentenced to one year in prison, authorities announced Thursday.

The sentence for Seth Andrew, 43, was handed down about a year after he was first arrested on charges including wire fraud. Andrew 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. The thefts began days after Democracy Prep rebuffed Andrew's offer to return as the group's leader, authorities said.

"Pull out of a nosedive"

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. But by early 2019, Andrew had "grown frustrated with decisions" made by Democracy Prep and tried to take back control of the organization, according to authorities.

On March 10, 2019, Andrew emailed several Democracy Prep leaders, including its chairman, offering to return as "President" if he would be paid "$25k/month as [a] salaried employee and basic frugal expenses" — plus a $250,000 bonus if he met certain deliverables that Andrew himself laid out, authorities say.

"[E]very single day that goes by, this situation becomes exponentially more difficult and the ability to pull out of a nosedive becomes harder," Andrew told the Democracy Prep leaders, prosecutors said. "So after 24 hours, my monthly salary expectation will go up every day that we’re not under a signed contract."

But Democracy Prep declined Andrew's offer. A couple of weeks later, on March 28, 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.

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.

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 said.

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

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.

"Attempt to punish"

Andrew was arrested in New York on April 27, 2021. The investigation into his finances was conducted by the FBI, while his prosecution was handled by federal prosecutors in Manhattan.

After initially pleading not guilty, he switched his plea to guilty in January, court records show.

The morning of Andrew's arrest, Democracy Prep's CEO sent a message to families and alumni, calling 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 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."

Before Thursday's sentencing, Andrew had paid back $218,005 in restitution to Democracy Prep, plus $22,537 in profits that he had made from the illicit transactions, according to the U.S. Department of Justice.

"Andrew committed this crime to attempt to punish non-profit charter schools because they declined his offer to return as their leader," said Damian Williams, the U.S. Attorney for the Southern District of New York, in a statement.

"Thankfully, the victim of Andrew’s crime was resilient, and its important work continues. Today’s sentence sends a message that those who engage in fraud schemes and steal from others will face appropriate consequences for their conduct."

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