Former Obama White House aide Seth Andrew sentenced to year in prison for charter school theft scheme

Former Obama White House education advisor Seth Andrew was sentenced Thursday to a year-and-one-day in federal prison for a scheme to steal $218,000 from a New York charter school network he founded.

Andrew, 43, also was fined $5,000 at his sentencing in U.S. District Court in Manhattan. Prior to Thursday's proceding, he had paid $218,005 in restitution to the network, Democracy Prep Public Schools, and $22,537 in forfeiture, prosecutors said.

He was arrested in April 2021 on charges of wire fraud, money laundering and making false statements to a financial institution. He pleaded guilty in January to wire fraud.

In sentencing Andrew to 366 days in prison, Judge John Cronan was actually giving him a break.

If Cronan had sentenced Andrew to just one day less, or a full year, Andrew would have been required to serve every day of that term.

But the slightly longer sentence that he received makes Andrew eligible for so-called good time credit, meaning he likely will only serve 85% of his sentence, or a little more than 10 months.

"I wish every single day that I had not done this," Andrew told Cronan in a statement he read out in court. "I feel a constant sense of remorse and shame. I do not blame the victim."

"I hope that future students can learn from my mistakes and from my sincere accountability," he said. "This court can be certain nothing like this will ever happen again ... I am profoundly sorry and ask for you forgiveness."

Andrew, who is the husband of CBS News anchor Lana Zak, founded Democracy Prep Public Schools in 2005. Zak was never accused of wrongdoing in connection with Andrew's case.

Prosecutors said that in 2019 — more than two years after severing ties with Democracy Prep — he looted money from escrow accounts belonging to individual schools in the charter school network.

Andrew then used more than half of those funds to maintain a minimum balance in a bank account, which entitled him and Zak to a more favorable interest rate for a mortgage on their Manhattan residence, valued at more than $2 million, prosecutors had previously said.

Manhattan U.S. Attorney Damian Williams in a statement Thursday, said, "Seth Andrew was sentenced today for stealing from those who once trusted him."

"Andrew committed this crime to attempt to punish non-profit charter schools because they declined his offer to return as their leader," Williams said.

"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." 

A spokesperson for Andrew on Thursday in a statement said, "Seth never received a mortgage benefit from these funds and never transferred them into any personal account."

The spokesperson also said Andrew was never motivated by greed, and disputed prosecutors' arguments that he had transferred the funds out of DPPS accounts to cause the organization any harm.

"His entire career belies their false assertion," the spokesperson said.

"Seth transferred dissolution escrow funds that he had been told were in danger of being lost due to their dormant status. He moved these funds to another non-profit, a fact Seth never disputed," the spokesperson said.

That other non-profit bought a defunct college in Vermont with the goal of reopening it in a new form.

Democracy Prep, in its own statement, said "We are grateful this sad chapter is finally closed and thank the US Attorney and FBI for their hard work on the case."

The CEO of Democracy Prep at the time of Andrew's arrest last year called his actions "a profound betrayal of all that we stand for," and said that a "series of financial safeguards" that were instituted after she took over her post in 2019 "led directly to the discovery of Seth's unauthorized withdrawals." The network then contacted authorities about his actions.

Andrew accepted a job in the U.S. Department of Education in 2013, after President Barack Obama began his second term. He later became a senior advisor in the Office of Educational Technology at the White House. 

Andrew continued being paid by Democracy Prep while serving in the Obama administration, but then severed ties with the network in January 2017.