Calling John Oliver! The charter lobbyists have been criticizing Oliver for his expose of charter fraud last Sunday. Unfair, they say. Untrue, they say. Slanders charters, they say. Let’s see how they fit this story into their narrative.
Nicholas Trombetta, founder of the Pennsylvania Cyber Charter School, pleaded guilty to stealing $8 million from the school and diverting it for his personal use. Trombetta’s school was often featured on television as the nation’s first virtual charter. With an enrollment of 10,000 students from across the state, Trometta had receipts of $100 million a year. What to do with all that dough rolling in from taxpayers?
I have written about this scandal on several occasions, from the time Trombetta was charged in 2013. (See hereand here and here. Another cyber charter leader in Pennsylvania, June Brown, who ran the K-12 Agora Charter, was arrested and charged with stealing $6 million.
The Associated Press reports:
“PITTSBURGH (AP) — The founder and former CEO of an online public school that educates thousands of Pennsylvania students pleaded guilty Wednesday to federal tax fraud, acknowledging he siphoned more than $8 million from The Pennsylvania Cyber Charter School through for-profit and nonprofit companies he controlled.
“In entering his plea, Nicholas Trombetta, 61, who headed the school, acknowledged using the money to buy, among other things, a Bonita Springs, Florida, condominium for $933,000, pay $180,000 for houses for his mother and girlfriend in Ohio, and spend $990,000 more on groceries and other items.
“He manipulated companies he created and controlled to draw the money from the school, also spending it on a $300,000 plane, Assistant U.S. Attorney Stephen Kaufman said.
“Trombetta was making $127,000 to $144,000 annually at PA Cyber when he ran the illegal tax evasion scheme from 2006 to 2012. He faces up to five years in prison when he’s sentenced Dec. 20.
“By running the money through the companies or their straw owners, Trombetta avoided income taxes, though prosecutors haven’t said how much. Most of the siphoned money was squirreled away in Avanti Management Group, which functioned as Trombetta’s retirement savings account, Kaufman said.
“This case reflects the priority we’ve placed on protecting against fraud in education,” U.S. Attorney David Hickton said.
“The school, founded in Midland in 2000, had more than 11,000 students across the state when Trombetta was charged three years ago and still has more than 9,000. As a public institution, it’s funded by federal, state and local taxes. Districts across the state pay the school to educate any students who opt to enroll in PA Cyber instead of a bricks-and-mortar school.
“Trombetta almost didn’t plead guilty Wednesday when his attorney, Adam Hoffinger, began sparring with Kaufman, who had to describe the complicated conspiracy to the judge.
“Kaufman said Trombetta used Avanti, the National Network of Digital Schools and other companies in the scheme. The Network of Digital Schools markets a curriculum developed in conjunction with PA Cyber and sold it back to the school, while Avanti provided unspecified management services, the prosecutor said. Avanti had four owners who pretended to be equal 25 percent partners when, in reality, Trombetta owned 80 percent of the firm, Kaufman said.”