Marlboro College

In June 2020, Seth Andrew's Democracy Builders bought the former Marlboro College campus for $225,000 in cash and the assumption of $1.5 million debt the college owed to the Marlboro Music Festival. Andrew was arrested and removed from its board.

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NEW YORK CITY — The money Seth Andrew stole in 2019 from Democracy Prep, the charter school network he started in 2005, was used as a down payment toward the purchase of the campus of Marlboro College in Marlboro, Vt.

So wrote Ryan Finkel, assistant U.S. attorney, in a sentencing memorandum filed with the federal District Court for the Southern District of New York.

The day before Democracy Builders, which Andrew founded in 2010, paid $225,000 to purchase the campus of the former Marlboro College, Andrew transferred $212,000 “of stolen funds” into Democracy Builders operating account, wrote Finkel.

But that’s not all Andrew did with the money, he wrote.

With the money in his account, Andrew secured a discounted 2.5 percent interest rate on a $1.8 million mortgage for a three-bedroom apartment on Central Park he and his wife, CBS news journalist Lana Zak, purchased for about $2.3 million.

“This was a crime of opportunity committed by a man who was successful, educated and knew better,” wrote Finkel.

But what really drove Andrew to commit his “brazen and shameless act,” contended Finkel, was “to exact revenge on [Democracy Prep] simply because they declined his request to return as their leader.”

After graduating from Brown University in Providence, R.I., in 2000, and before founding Democracy Prep, Andrew taught in South Africa and South Korea. He returned to the United States for his master’s degree in school leadership and development from Harvard University, and then spent two years working as a special education teacher in Massachusetts.

In 2010, five years after founding Democracy Prep, Andrew started the nonprofit Democracy Builders Inc., to help families and students advocate for policy changes and in 2013, he took a job as a technology advisor in the U.S. Department of Education and the Obama White House.

In 2020, Democracy Builders purchased the campus of Marlboro College, after which the college closed and merged with Emerson College in Boston.

Democracy Builders established Degrees of Freedom on the campus, “a new kind of college model for students struggling to bridge the gap between high school and traditional four-year colleges, and one that would not burden its students with debt,” they wrote.

But Degrees of Freedom’s launch was delayed by the COVID-19 pandemic, and after Andrew was arrested and removed from its board, the program was shut down. The campus was eventually sold to Marlboro Music.

But before that, in 2018 and 2019, wrote Finkel, Democracy Prep was facing “certain financial challenges” that resulted in the closure of several of its charter schools.

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In an email to sent to the board on March 10, 2019, Andrew suggested he step in as president at $25,000 a month (which Finkel described as “a lavish salary”) with “basic frugal expenses” included.

“If I succeed in all the deliverables,” Andrew wrote in his email, “I’ll get a $250K bonus in July 2020.”

Democracy Prep rejected Andrew’s offer, and 18 days later, wrote Finkel, he walked into a Manhattan bank and closed two of Democracy Prep’s escrow accounts, receiving two checks totaling $142,000.

That same day, he went to a different Manhattan bank and opened a new account in the name of “Democracy Preparatory Charter School,” which the U.S. Attorney’s Office labeled “Fraud Account-1” in its filings, and associated that account with the address of Democracy Builders.

Six months later, again without permission, wrote Finkel, Andrew closed out a third Democracy Prep escrow account, received a check in excess of $75,000, and opened a new account at another bank in the name of Democracy Builders Fund Inc., in which he deposited the check.

He then later transferred the proceeds to a Democracy Builders operating account, which was a deposit toward the purchase of the campus of Marlboro College.

“Andrew was unhappy that his former school had rebuffed him, so he took its money to hurt the organization and the people who had replaced him at its helm,” wrote Finkel. “Andrew responded by taking $218,000 from the very school he built to serve those students, undoubtedly exacerbating the school’s financial problems. But that was the point. To do harm.”

Andrew was arrested on April 27, 2021, charged with wire fraud, money laundering and making false statements to a bank.

In documents filed earlier this month, Andrew’s attorneys asked the court to sentence their client, who pleaded guilty to one count of wire fraud last year, to one year of home confinement and three years of probation.

In their filing, Andrew’s attorneys contended their client’s theft was fueled by his frustrations with the charter school organization he founded in 2005 and had left in 2013. They also argued that Andrew took the money out of a non-interesting-bearing escrow account and moved it into one that was accumulating interest.

“It is correct that Andrew did not use the money he stole to buy a fancy car, but it is wrong to frame the defendant’s crime as something that did not benefit him,” wrote Finkel in his filing. “Andrew also used the money he stole for a personal benefit that mattered to him — the success of Democracy Builders, the organization that became his primary focus. Propping up the Democracy Builders was not some trivial benefit. ... If that organization failed, it would mark a failure for Andrew.”

“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,” stated a letter submitted by Democracy Prep. “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.”

According to federal sentencing guidelines, Andrew should be sentenced to 21 to 27 months in prison, wrote Finkel, though probation officials recommended a sentence of 366 days, in recognition of his non-violent offender status.

Bob Audette can be contacted at raudette@reformer.com.