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In bid to avoid jail time, Seth Andrew says dispute with Democracy Prep leaders precipitated theft

Superintendent Seth Andrew answers questions after the lottery event at Democracy Prep

Superintendent Seth Andrew answers questions after the lottery event at Democracy Prep. Andrew, who left the schools in 2013, pled guilty to stealing funds from the network but is seeking to avoid jail time.

Geoff Decker / Chalkbeat

In a new court filing, Democracy Prep charter school founder Seth Andrew says he illegally took money from the schools after a dispute with network leaders. 

Andrew’s lawyers suggest this disagreement over financial management — and less so personal financial gain — motivated his decision to steal money from the charter network.

“Seth recognizes the enormity of his mistake. He realizes that he was acting out of frustration and a desire to be proven right,” his lawyers write. “In many respects, his actions can be understood as the response of a founder trying to continue to influence leadership that had chosen to move on from him.”

They also say that his “management style” contributed to his decision, writing, “Seth moved quickly and decisively and did not allow himself to get hung up on why he could not, or should not, do things.”

Andrew, a prominent charter school advocate, pled guilty to federal wire fraud charges earlier this year and is now seeking to avoid jail time. The filing offers the first public accounting of the case from Andrew’s perspective. 

He is set to be sentenced at a Manhattan courthouse July 28. The U.S. Attorney for the Southern District of New York is recommending that Andrew go to prison for at least 21 months, according to a separate filing

“There should be no mistake that Andrew stole this money to further his own interests,” the government filing says. “Indeed, he committed this brazen and shameless act to exact revenge on DPPS simply because they declined his request to return as their leader.” 

Notably, though, the prosecutors downplay their initial claim that Andrew took the money primarily to get a lower home interest rate. The new filing describes this as a “collateral benefit.”

Andrew founded the New York City-based Democracy Prep charter school in 2005 soon after earning degrees from Brown and Harvard universities. The network has since grown to 24 schools in five regions, and has a track record of boosting test scores and students’ civic engagement. Andrew left his leadership role at the network in 2013 to work in the U.S. Department of Education and then White House during the Obama administration. He later cofounded another charter school in Washington D.C.

Andrew was arrested in April 2021, stunning many in the charter community. Federal prosecutors in the Southern District of New York initially alleged that he had stolen more than $200,000 from a Democracy Prep account in order to qualify for a lower interest rate on a $2.4 million Manhattan apartment that he and his wife were seeking to buy.

Despite having now pled guilty to illegally taking funds, Andrew offers a different account of what happened in the new court filings designed to influence his sentencing. His attorneys acknowledge the lower interest rate was a “factor” in the crime, but say that “it would be a mistake to say that Seth’s movement of the funds was driven by financial greed.”

Instead, they claim, the events were precipitated by a dispute Andrew had with leadership of Democracy Prep, where they say he still served in an “unpaid, informal consulting and advisory role” in 2019.

In March of that year, the filing says, Andrew “formally” presented concerns to the network’s board, including that certain funds held in reserve were in accounts that didn’t earn interest. The board rejected Andrew’s suggestions. 

“Increasingly frustrated by the unwillingness of Democracy Prep’s board or new leadership to accept his proposals more generally, and motivated in large part by a desire to prove that he was right about these funds and financial practices, Seth made a terrible decision, for which he fully accepts sole responsibility,” his lawyers wrote. 

Later that month, Andrew transferred those reserve funds into a new account at a separate bank that offered customers a lower mortgage interest rate if they had at least $1 million in their accounts. 

In May, Andrew again transferred the stolen funds into the account of Democracy Builders, an education nonprofit that he ran and that used to be affiliated with Democracy Prep.

“Seth did not spend any of the transferred funds for personal gain,” his lawyers write. “At the time he transferred the funds to Democracy Builders Fund, Seth had already contributed hundreds of thousands of dollars of his own funds in loans and donations to Democracy Builders Fund — far more than he had ever been paid by the organization.”

They also say that the lower interest rate would have saved Andrew only $170 a month over 10 years, and that even without the stolen money Andrew “possessed other funds, including retirement funds, that were independently sufficient to meet the threshold for the interest rate deduction.”

Andrew was primarily motivated by a desire to prove the board wrong and use those funds in a more effective way through his nonprofit, his lawyers say.

“None of these points take away from the fact that Seth is guilty and accepts full responsibility for his conduct,” the filing concludes. 

Prosecutors offer a roughly similar timeline of events, but characterize them differently. The government highlights an email Andrew sent recommending that Democracy Prep rehire him to help address what he describes as the mismanagement of the organization. After that didn’t happen, Andrew took matters into his own hands by transferring money from the charter network, the U.S. Attorney contends.

“Setting aside the inappropriate victim-blaming in his submission, the money was not Andrew’s to manage,” the government filing says. “His view that he could simply take it because he was frustrated and angry underscores that a substantial sentence is necessary to ensure that Andrew understands the seriousness of his offense.”

The prosecution also contends that Andrew benefitted in indirect ways from the money — by “satisf[ying] his ego and harm[ing] Democracy Prep” while also benefiting his own nonprofit. 

Strikingly, though, the government now deemphasizes its initial assertion that Andrew took the funds to obtain a lower mortgage rate.

Prosecutors concede it “may be true” that Andrew could have qualified for a lower interest rate with other funds. “Nonetheless, even under the defense’s telling, it appears Andrew at least sought to use the stolen money to achieve the full mortgage interest savings,” prosecutors write.

The government also does not claim that Andrew spent the stolen money on personal items, but instead says he used it to support his nonprofit. 

Andrew apologized in a January hearing where he pled guilty. “I’m truly sorry for what I have done,” he said. “I have tremendous remorse for the impact that it has had on the schools, the alumni, and my own family.”

Asked by the judge whether he believed that he had authorization to transfer the funds, Andrew responded, “At the time, I did not dwell on those details.” Prosecutors contend that this shows he has not accepted responsibility for his actions.

Andrew’s lawyers say that he has already faced substantial punishment in the form of public humiliation — his arrest quickly became national news — and financial strain on his family. The latest filings also include dozens of letters of support from Andrew’s family, friends, and former students and colleagues. 

He is seeking a sentence of home confinement followed by three years probation. The government is seeking a prison term on the “lower end” of the 21 to 27 months sentencing recommendation.

In February, Andrew repaid Democracy Prep, his lawyers say, a fact that the network spokesperson confirmed. 

Still, Democracy Prep offered a pointed response to Andrew’s filing. “His inability, even after pleading guilty, to take full responsibility for his actions and his attempt to shift blame onto his victim are behaviors and excuses he would not have accepted from even our very youngest scholar,” spokesperson Jeffrey Schneider said in a statement. 

“Given the severe disciplinary policies he employed towards students when he ran the organization, policies we have since reversed, his plea for special treatment before the court is ironic and hypocritical,” Schneider said. “With great effort, strong leadership, and the hard work of our staff and scholars, we have been able to offset the real damage his crime and actions did to the good name and reputation of our organization.” 

The government included Democracy Prep’s statement in its filing seeking to put Andrew in prison.

This story has been updated to include details from the prosecutors’ sentencing submission.

Matt Barnum is a national reporter covering education policy, politics, and research. Contact him at mbarnum@chalkbeat.org.

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