Seth Andrew, founder of the Democracy Prep charter schools and a nationally recognized champion of school reform, was sentenced to a year and a day in prison Thursday for illegally taking more than $200,000 from the network he helped create.

Appearing before Judge John P. Cronan at the federal courthouse in New York City, Andrew’s defense team requested he begin serving his sentence for wire fraud no later than Sept. 22 at FCI Otisville, a medium-security prison 82 miles outside New York City. The prosecution did not object.

Hands behind his back, fingers fidgeting, Andrew acknowledged doing “harm to Democracy Prep” and said he hoped “future students can learn from my mistakes.” When he finished, his eyes welled with tears and he looked back at family and friends in the courtroom.

Calling the sentencing “particularly difficult,” Cronan said he weighed Andrew’s track record of civic achievement against what he called “a very conscious decision to violate the law.”

The judge referred specifically to a character reference sent by a former student, one of 57 letters written in support of a lighter sentence. “Among other things, you taught her about what it means to be accountable,” he said. “I hope you’ll take those words to heart.”

Financial trouble

The case rocked the education world when it was announced last year, and its intricacies revealed a deep leadership conflict at the heart of one of the country’s most acclaimed charter networks.

Andrew, who founded Democracy Prep in 2005 and served as CEO for much of the next eight years, was arrested last April and charged with wire fraud and money laundering. Prosecutors alleged that he siphoned over $200,000 from escrow accounts maintained by several Democracy Prep schools, transferring it to new accounts under his control and mingling the stolen monies with those of his Democracy Builders nonprofit group. The scheme allowed him to inflate his apparent wealth and attain a lower mortgage interest rate for a $2.3 million Manhattan apartment, according to a .

Andrew illegally misrepresented his relationship with the network, which had been officially severed in 2017, through the use of an old institutional email address. The criminal complaint included damning security footage of him sitting in the bank from which he withdrew the escrow funds, clad in a branded Democracy Prep hat that he was rarely photographed without.

After initially indicating that he would fight the charges in court, Andrew pleaded guilty to one count of wire fraud in January. In the weeks leading up to his sentencing, a volley of competing documents were filed by his attorneys and federal prosecutors — each emphasizing their own gloss on the case.

Citing the deliberate and long-running nature of Andrew’s deception as he first misappropriated and then shuffled the money between banks, the U.S. Attorney’s Office for the Southern District of New York asked the court to hand down a sentence “on the lower end” of the legal guidelines of 21–27 months. The defense asked for a period of home confinement, followed by three years’ probation.

In arguing for a harsher sentence Thursday, Assistant U.S. Attorney Ryan Finkel noted that during the period he committed his crimes, Andrew was giving interviews extolling Democracy Prep’s civic values.

“He wasn’t following through on the actions he was preaching,” Finkel said.

But in a recent twist, prosecutors modified their characterization of the motive behind Andrew’s “brazen and shameless act”; while acknowledging that the favorable mortgage terms constituted an additional inducement, accused him of primarily seeking revenge against Democracy Prep for turning down his offer to return as a short-term CEO in spring 2019. 

Painting a picture of an organization in disarray, Andrew said he asked the Democracy Prep board to offer him a contract through that July at a salary of $25,000 per month and a potential $250,000 bonus. But those expectations would increase, he warned, for every day he remained unhired and the network’s “financial, talent, and organizational situation” — including its handling of individual schools’ escrow accounts, which are mandated by the state to cover costs in the event of a school closure — deteriorated further. Ultimately the pitch was rejected, and Andrew misappropriated $142,000 just a few weeks later. An additional $75,000 was fraudulently withdrawn that October.

Whether or not the true state of Democracy Prep was as dire as he claimed at the time, Andrew’s brainchild had undergone enormous changes over the previous decade. Established as a single middle school in Harlem and designed to prepare low-income students for both college and democratic participation, Democracy Prep swelled to a network of over 20 campuses across five states and Washington, D.C. The schools administered the citizenship exam as a graduation requirement, taught students to lobby politicians and register voters, and sent them on trips to Europe and Asia. 

The results won national acclaim. Not only did Democracy Prep schools post some of the most impressive standardized test scores in New York, research showed that their alumni were significantly more likely to vote and be registered to vote than their same-age peers. After nearly a decade in leadership, Andrew left in 2013 to take a job in the Obama administration.

But cracks began to show in the coming years. The network’s nationwide spread was fueled in part by grants from the federal Charter School Program — investment that came with conditions around the speed and quality of expansion. Some critics, including a former chief financial officer who had recently been terminated, argued that Democracy Prep had become overextended in its commitments to new sites, giving way to acute financial strain. 

A few months before Andrew’s proposed return, according to documents obtained by The 74, then-CEO Katie Duffy emailed school staff warning of “significant deficits across our network of schools” and forecasting a period of retrenchment. Even before the school year began, she announced that the network would cut ties with its Washington campus, which had floundered academically from the outset.

It was this dysfunction, combined with a “frustration with the management of DPPS during a time of uncertainty,” that led to Andrew’s scheme, in a response to the U.S. Attorney’s office. While his plot was criminal, they conceded, it did not arise from a desire for self-enrichment or vengeance.

In a statement provided to The 74, a spokesperson for Andrew argued that the U.S. Attorney’s office had “backed off the false narrative of greed” as an explanation for the fraud, instead claiming that he had taken the money as a vindictive measure against his former employer.

“In a last-minute submission, the government contended that Seth transferred these funds to cause unspecified harm to organizations he founded while admitting that he still cares about this mission deeply to this day,” the statement read. “His entire career belies their false assertion.”

A similar argument was sounded in from a noteworthy ally: Eric Grannis, a prominent New York City charter advocate and husband to Success Academy head Eva Moskowitz. Though not a friend of Andrew’s — in fact, Grannis wrote, the two clashed over at least one contentious charter school issue — he spoke up out of a belief that the Democracy Prep founder had acted on principle for the benefit of the Democracy Builders group, formerly a sister organization of Democracy Prep.

“Although my dealings with Mr. Andrew were limited, he is someone whose nature is readily apparent and he is deeply idealistic and zealous, a real ‘true believer,’” Grannis wrote. “I am therefore convinced that his primary goal in taking these funds was to put them to what he believed was good use, not to reduce his interest rate on his mortgage or for any other personal benefit.”

Under Andrew’s leadership, Democracy Builders had set its eyes on a bold new project in the months before the pandemic: the acquisition and reopening of Marlboro College, a defunct institution in Vermont, as a two-year academic program for disadvantaged students. The deal, in the tiny community where the new school was to have been sited, was ultimately halted over Andrew’s prosecution and Democracy Builders’ own organizational crisis.

A ‘sad chapter is finally closed’

After his guilty plea earlier this year, Andrew returned the $218,005 he misappropriated from the network and paid a forfeiture obligation to the government of $22,537. On Thursday, Judge Cronan added a $5,000 fine.

U.S. Attorney Damian Williams said in a press release that the sentence would send a message to potential white-collar criminals.

“Andrew committed this crime to attempt to punish non-profit charter schools because they declined his offer to return as their leader,” said Williams. “Thankfully, the victim of Andrew’s crime was resilient, and its important work continues.” 

In an email to her employees, network CEO Natasha Trivers said she was “grateful this sad chapter is finally closed.”

“Seth’s actions are a profound betrayal of all that Democracy Prep stands for,” she wrote.

Disclosure: Campbell Brown sits on Success Academy’s board of directors. Brown co-founded The 74 and sits on its board of directors.

Andrew has agreed to pay restitution to Democracy Prep. He could face up to 20 years in prison when he is sentenced on April 14. 

By that time, nearly a year will have passed since the school reform giant was first arrested and charged with fraud, money laundering, and making false statements to a bank. Prosecutors from the U.S. attorney’s office for the Southern District of New York accused Andrew of misappropriating the money in order to secure a better mortgage rate for a million-dollar Manhattan apartment.

“Seth Andrew, a former White House advisor, admitted today to devising a scheme to steal from the very same schools he helped create,” said U.S. Attorney Damian Williams in a statement. “Andrew now faces time in federal prison for abusing his position and robbing those he promised to help.” 

Andrew first launched Democracy Prep in 2005 at a single middle school in Harlem. The fledgling charter gained interest from families — and powerful political allies, such as then-U.S. Rep. Charles Rangel — through its curricular focus on civics instruction and democratic engagement. In a little over decade, his brainchild had expanded to campuses across New York, New Jersey, Louisiana, Texas, Washington, D.C., and Nevada. 

As their enrollment grew to over 6,000 students system-wide, the schools earned praise for their academic performance and impressive record of sending graduates to college. Additionally, from the Mathematica research group found that Democracy Prep students were much more likely to vote, and to be registered to vote, than otherwise similar peers.

Andrew left the organization in 2013 for a position in the U.S. Department of Education. But he remained a brand ambassador for Democracy Prep, seldom spotted in public without his yellow cap bearing the network’s logo. 

He was photographed in that hat in security footage from one of the banks where he improperly withdrew funds from three Democracy Prep school accounts. By New York state law, every charter school must maintain substantial funds in escrow in the event that they are unexpectedly forced to dissolve. 

In a statement provided to The 74, Andrew’s attorneys, Tim Doherty and Edward Kim, said that their client had “worked tirelessly to expand educational, democratic, and technological opportunity to disenfranchised communities around the world.”

“Seth’s life has always been motivated by a civic mission, and he deeply regrets his past mistakes. He has, with courage, accepted responsibility for them. With the help and support of his family and loved ones, Seth looks forward to deepening his commitment to service and innovation in the next chapter of his life.”

In an email, a Democracy Prep spokesperson wrote that Andrew “will make full restitution to our institution for all of the money he stole. We are glad that this sad chapter is over and thankful to the authorities for their hard work on this case.”

The bombshell federal indictment of a well-known educator will delay the planned opening of a new experimental college he helped design for low-income, first-generation students. But it won’t stop it, the project’s new CEO said recently.

“We will be opening in fall 2022, for sure,” said Chandell Stone.

In the meantime, she and others at Degrees of Freedom, as it’s called, are doing what they can to delicately sever ties to both the suspect in the criminal case and the non-profit he created.

The “social venture incubator” Democracy Builders last year announced it was buying the southern Vermont campus of Marlboro College to create a two-year, hybrid high school and early college program. Organizers last month told supporters that the program would welcome its first students this September.

On April 27, everything changed: The U.S. Attorney’s Office for the Southern District of New York announced that the non-profit’s founder, Seth Andrew, with wire fraud, money laundering, and making false statements to a financial institution. If convicted, he faces up to 70 years in prison.

A founder of the well-known Democracy Prep charter school network and a one-time to Pres. Obama, Andrew, 42, allegedly stole $218,005 from a network account in 2019 in order to secure a lower interest rate on a mortgage for a nearly $2.4 million Manhattan apartment, prosecutors said. He was expected to plead not guilty and declined to comment for this article.

After news of Andrews’ indictment spread, Democracy Builders held an emergency meeting to remove him as board chair.

Last week, Stone said efforts to separate the new college from the alleged crime are going even further: When Degrees of Freedom incorporates this month, it will have no formal association with Andrew. She and members of the Democracy Builders board “are working amicably towards separating the entities, as to allow for formal incorporation without Seth Andrew.”

The first problem: Degrees of Freedom doesn’t actually own the Marlboro campus — Democracy Builders does. That has complicated the college’s efforts to open as planned, Stone said.

“We’d love to be in Marlboro, but the reality is this just happened last week — and we were in the middle of telling kids, ‘Come to campus.’ And I just didn’t feel comfortable with all of the dust-up.”

The developments mean it’ll be at least another year until more than just a handful of students can take part in what many observers see as a promising experiment.

When he announced the new college in 2020, Andrew told that the venture represented “a new model for higher education that doesn’t exist for most kids.”

To that end, Democracy Builders spent $1.7 million to buy the 500-acre campus of Marlboro, a small liberal arts college that, like many of its kind, faced declining enrollment. In 2019, it merged with Boston’s Emerson College, sending students and faculty packing.

Degrees of Freedom last fall ran what it called a successful small pilot of its model with 20 students.It plans to offer a low-residency hybrid program that would require students to be on campus for just two weeks per trimester, or six weeks per year. For the rest of the academic year, they’d be expected to study online, with apprenticeships tied to their majors.

The program’s website actually lays out two separate programs: a three-trimester “,” for high schoolers, summer included, priced at $9,000, that provides SAT and ACT prep, college application support, and an option for international travel, among other offerings. It’s open to high school seniors with 2.5 GPAs, as well as GED holders who aren’t enrolled in college.

For $18,000, high school graduates and GED holders can enroll in a two-year “” designed to help them “gain entrance to competitive colleges.”

Stone said the program will also allow alumni to find full-time employment in their area of concentration or access to tech-focused boot camps that many low-income students don’t typically attend.

“What we want to do is figure out: How do we get low-income students, first-generation college students, to gain access to well-paid careers, and do so with zero dollars in student debt?” she said. Because Degrees of Freedom is “reverse-engineering the program from the Pell Grant,” basing its costs on the federal grant’s maximum allowance to students, she said, low-income students should expect to graduate debt-free.

Kevin Carey, who directs the Education Policy program at , the left-leaning Washington, D.C., think tank, said that’s a laudable — and unusual — goal for a tech-focused college.

“You only do this if you begin from the point of view of, ‘How do I build a college that’s good at serving low income students?’ No one does that. Everyone’s approach to technology is, ‘How do I make money?’”

Richard Saudek, a Montpelier, Vt., attorney who chairs Marlboro’s board of trustees, said the board chose Degrees of Freedom because “the people involved were quite experienced starting up schools that served underserved populations.”

Marlboro officials, he said, “felt that their plans seemed to make sense — and that it would be a good thing to do, basically, to have them purchase the campus at a low price. And we had a lot of hopes.”

Saudek said the sale of the campus won’t be affected by Andrew’s legal troubles. The transaction had no “clawback” or reversal provisions. “They had it to do what they could with it,” he said.

Nevertheless, he admitted that trustees “are watching this situation unfold and were alarmed when they learned about the indictment.”

New America’s Carey had a similar response when he read the news: “Part of my reaction to the whole thing, beyond ‘What the hell?’ was ‘Too bad. This is just going to kill this thing.’”

He recalled hearing Andrew’s pitch as the program was taking shape: Rather than forcing students to borrow $20,000 to attend “some shady for-profit college” or take on even more debt to attend a four-year college without graduating, Carey said, he was intrigued by the notion of using hybrid learning to bring costs down so low that a student could cover them entirely with a Pell Grant.

“At its most basic level, that’s a good idea,” Carey said.

At the moment, the effort is relying largely on funding from the Silicon Valley investor , as well as a group of wealthy donors, to help keep it afloat. In an April 8 email to supporters prior to his indictment, Andrew urged them to “Help us identify funders for our work.” The plea linked to a direct donation site for the college. Andrew noted, “Our entire cost for tuition-room-and-board costs less than a Pell grant. However, we need philanthropy until we break-even at ~500 students, which we hope to achieve in 2022.”

Stone said recent developments have affected fund-raising, and that a few donors have backed out. “We are now working to recover grants for which Seth was the lead point of contact,” she said.

It’s significant that the idea for Degrees of Freedom emerged from the world of K-12 charter schools, Carey said. Unlike most new online universities, which are typically for-profit, charter schools have historically offered educators ways to create mission-driven, non-profit schools that help low-income students.

“There’s no comparable mechanism in higher education for that,” he said.

The irony is that Stone and others now find themselves working to both listen to the needs of these students and separate themselves from Andrew, whose work has long been synonymous with the very charter schools that serve them.

“My goal is to stay laser-focused on ‘How do we continue to uplift their voices?’” she said. “‘How do we make sure that their voices don’t get drowned out by a personal matter that doesn’t really have anything to do with them, and with this project?’”