New York, N.Y.
I will start by explaining the factors I’ve considered in arriving at Seth Andrew’s sentence. First, as required, I’ve considered the advisory guidelines range, which I have determined to be 21 to 27 months’ imprisonment.
The guidelines range is only one factor that I must consider in deciding the appropriate sentence. I am also required to consider the other factors, including the nature and circumstances of the offense and the history and characteristics of the defendant; the need for the sentence imposed to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense; the need for the sentence to afford adequate deterrence to criminal conduct, to protect the public from further crimes of the defendant, and to provide the defendant with needed education or vocational training, medical care, or other correctional treatment in the most effective manner.
Other factors include the kind of sentences available, the guidelines range, any pertinent policy statements, the need to avoid unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar conduct, and the need to provide restitution to any victims of the offense.
I also must impose a sentence that is sufficient but no greater than necessary to comply with the purposes of sentencing. And I’ve given substantial thought and attention to each of those factors in arriving at today’s sentence.
All sentencings are very difficult. Today’s is no different. But what makes today’s sentencing particularly difficult are the many relevant considerations that point in polar opposite directions in this case. There are many considerations that are in Mr. Andrew’s favor and counsel for leniency, while many other factors call for a substantial sentence. And both in their written submissions and today in court, counsel has very eloquently discussed these.
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I’ll start with the guidelines. I just mentioned that the range is 21 to 27 months’ imprisonment. Now, that range is largely driven by the loss amount.
Of course, it is proper to consider that loss amount. Mr. Andrew stole a lot of money from three Democracy Prep schools, a total of $218,005. And he moved that money to another entity that he was leading at the time.
But I am also mindful that Mr. Andrew was not trying to enrich himself with the funds he stole, at least not in the usual sense. He did not pocket any of the money that was transferred out of the three schools’ accounts. He did not spend any of those funds on himself or his family. U.S. Prosecutor Ryan Finkel acknowledged he didn’t go on vacation, he didn’t buy a car.
Mr. Andrew did receive a relatively modest collateral benefit in connection with a mortgage because having the stolen funds at a particular bank at one point qualified him for a promotional rate, but clearly that was not his prevailing motive.
This wasn’t a situation, as Mr. Andrew’s defense attorney, Edward Y. K. Kim, noted, like many defendants convicted of wire fraud, of someone stealing money to line their own wallet.
But while Mr. Andrew may not have reaped significant personal profits from his fraud, his actions were targeted at a specific victim, and there was, in fact, harm caused to that victim.
So I will now say more about this crime and address the nature and circumstances of the offense and the need for the sentence to reflect the seriousness of the offense and the need to provide just punishment for the offense.
And for the most part, these factors do weigh in favor of a term of imprisonment.
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This is a serious offense. It transpired over many months, involved numerous financial transactions, and victimized three different schools in the Democracy Prep public schools network. It started on March 28, 2019, when Mr. Andrew closed the escrow account at two schools in the Democracy Prep network for which he remained a signatory.
He withdrew over $140,000 in total from those accounts. He withdrew $71,881.23 from Democracy Prep Charter School and $70,642.98 from Democracy Prep Harlem Charter School, and on that day he opened an account in the name of Democracy Prep Charter School. When he did so, he deposited the check from Democracy Prep Charter Schools, and because of the identical name, the bank accepted and deposited that check.
Now he didn’t also deposit the Democracy Prep Harlem Charter School check that day at the bank, and the reason for that appears to be clear. An in-person deposit might have been denied because of the different name on the account. Again, the check was made out to Democracy Prep Harlem School, and the new bank account was in the name of Democracy Preparatory Charter School. So instead, a few days later, Mr. Andrew deposited that second check remotely, via an ATM in Baltimore.
And unfortunately, he was not done. Just over six months later, on Oct. 17, 2019, he closed out the escrow account for a third school — Democracy Prep Endurance Charter School. And when he closed that account, the bank provided him with a check made out to that school in the amount of $75,481.10. As with the other two accounts, this was possible because Mr. Andrew was a signatory on that account.
And then a few days later, Mr. Andrew opened yet another account — this time, in the name of Democracy Builders Fund, Inc. And Democracy Builders is the name of the entity Mr. Andrew was then leading. He was looking to open up a college in Marlboro, Vermont. The purpose of the school was going to try to address college nongraduation rates by bridging the gap between high school and traditional four-year colleges.
By Nov. 19, 2019, Mr. Andrew had combined all those funds — the funds from the three schools’ escrow accounts — into that Democracy Builders Fund account. He closed the account he had opened with the checks from the Democracy Preparatory Charter School and Democracy Preparatory Harlem Charter, and he obtained a check for the funds before finding out that the bank with the new Democracy Builders Fund account would not accept that check because the account was in a different name than the check. So he then went back to the bank, obtained a new check made payable to Democracy Builders Fund in the total amount of $144,473.29 and successfully deposited it into the Democracy Builders Fund’s account. Combined with the other, the third check, he put the proceeds into a CD in the bank.
About six months later, on May 20, 2020, Mr. Andrew transferred the proceeds of that CD to yet another account at the bank, which I understand to be the operating account of Democracy Builders. And that account the following day sent a $225,000 wire transfer for a deposit for property that Democracy Builders purchased in Vermont.
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I walked through those transactions for a few reasons. This wasn’t one transaction — there were several of them. Mr. Andrew didn’t only once obtain a check from a Democracy Prep network school account — he did so three times. And even those withdrawals were separated by over a half a year. There were a series of transactions that spanned over a year, moving funds around.
I think it is a fair inference that these transactions were intended, at least in part, to conceal that the funds had any association with the Democracy Prep schools before the money arrived in the Democracy Builders Fund account in particular, to pay for the deposit on the property in Vermont.
So the question is: Why Mr. Andrew would do this? And his motive is somewhat troubling. He was in a dispute with Democracy Prep Public Schools. He was not happy with the direction of that charter school network. He thought he knew better and that he could fix the problem. So he made an offer to work with them in a leadership role and proposed a high-paying salary. He made an exploitive offer — accept my proposal within 24 hours, or my salary demand will go up. And Democracy Prep Public Schools said no. That didn’t make Mr. Andrew happy, and he soon took it out on Democracy Prep.
This was not simply an ego-driven act of impulse. This wasn’t a spur-of-the-moment act of frustration. There certainly was ego and frustration involved and a lot of arrogance, but it is also a very intentional and deliberate act against Democracy Prep.
It is impossible to know for sure what was going on in Andrew’s mind. It may have been an act of revenge against Democracy Prep, after the network did not heed his demands for a return, to retake the reins of the network. Maybe it was to make a point. In some form, it was to punish a nonprofit — and not just any nonprofit, but one that Mr. Andrew had built.
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I should note that I’m not persuaded that Mr. Andrew did this because he was motivated by a desire to demonstrate the financial mismanagement at Democracy Prep Public School, including concerns that its escrow funds were being held in noninterest-bearing accounts.
That explanation does not hold water. Pilfering money from those accounts was not in any way proof that he was right that the funds were not being managed properly. As the government noted in one of its submissions, it could only show that Democracy Prep was unwise to allow Mr. Andrew to still have access to those accounts.
And if he merely wanted to teach Democracy Prep a lesson about how their escrow funds could be better managed, there was no reason for him to keep the funds out of the three school accounts for over a year, and especially no reason to move those funds to another one of these operating accounts. He could have returned them at any point, but he did not. And that was because that conduct was not just to exact revenge or to target Democracy Prep but also to help defendant with another entity, Democracy Builders Fund.
Mr. Andrew had an interest in seeing Democracy Builders Fund trying to succeed. It was his project at the time. He had invested heavily in it. By moving that money to Democracy Builders operating account, he put that entity in a better position financially, which was shown that very next day when those funds went toward a down payment on a significant purchase of property in Vermont.
And this conduct at least had that potential to cause harm to that victim, Democracy Prep Public Schools, beyond just depriving the three individual schools of their funds.
Maintaining certain levels of funds in an escrow account is a requirement of the New York Board of Regents for charter schools. And to that end, I have considered that impact on that victims.
Democracy Prep Public Schools’ letter describes Mr. Andrew’s crime as “a profound betrayal of our schools, our values, and everything we teach our students about being responsible and caring citizens.”
And that harm very well may have gone beyond simply taking $218,000 from three of their schools’ accounts. This offense, which was committed by the founder of that school network and a role model for many, had an unqualifiable impact on that school network’s name and reputation.
As stated in the letter from Democracy Prep, they have had to work to offset that damage, and as I just mentioned, the pilfering of the escrow account for these three Democracy Prep schools could have been disastrous for those schools and their status in New York State.
Now I do note and credit that Mr. Andrew very promptly repaid the money he stole in restitution, and I certainly take that into account as well.
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I will turn to the factors that look at the need for deterrence and the need to promote respect for the law. The theme that resonated throughout many of the letters I received is that this was aberrant conduct for Mr. Andrew and did not reflect who he is as a person.
I would like to touch on those letters some more in a moment. But the letters also repeatedly emphasize the remorse Mr. Andrew feels for his criminal conduct, which was certainly conveyed to me a few moments ago when he spoke in court.
But there is still some degree of a need for deterrence in this case and for the sentence to promote respect for the rule of law.
If this conduct were truly aberrant, Mr. Andrew could have corrected it by transferring the money back. He didn’t — not the next week, not the next month, not even after a year.
And he could have stopped there. He could have withdrawn the funds from the Democracy Prep Charter School and Democracy Preparatory Harlem Charter, but he didn’t. Six months later, he transferred money out of a third school’s escrow account.
And as to more general deterrence, those who might be tempted to abuse a position of trust must realize that criminal activity will not be tolerated and will result in appropriate consequences.
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I have carefully considered the factors, including reviewing information about Mr. Andrew’s background and the many letters in support of him. And I agree with Mr. Kim that by and large Mr. Andrew’s history and characteristics are strong mitigating factors today. But I must note that Mr. Andrew is someone who had many opportunities that most criminal defendants who appear in this courthouse do not have.
He grew up in upper Manhattan and attended high school at the Bronx High School of Science, which is one of the most prestigious schools in the city, if not the country. He had the opportunity to be a congressional page in high school; he attended an elite Ivy League college, Brown University. He went on to Harvard Graduate School of Education.
He has held many prominent jobs, both in and out of the government.
These are opportunities that few people have, and to his credit, for much of his life, Mr. Andrew took advantage of that. His education and experiences in fact appear to have motivated him to make a positive impact in the area of civic education through his charter school network.
There is no question Mr. Andrew knew better, and made a very conscious decision to violate the law.
There is no excuse for this conduct. He doesn’t try to make any excuse, to his credit. But that’s particularly the case for someone who has had as many opportunities that Mr. Andrew has had.
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Now there is also no question that Mr. Andrew has done considerable good for much of his life. The government readily acknowledges this.
For many years, he dedicated himself to improving public education through the charter school network he created.The original mission of Democracy Prep and Mr. Andrew’s vision for it concentrated on helping vulnerable and disadvantaged children excel academically and achieve results that would otherwise have been very unlikely for them. By all accounts, Mr. Andrew worked hard toward that ambition, and the network of charter schools were expanded.
In the letters, I read about a number of success stories: Ayanna Mason was in the founding class of Democracy Prep Charter School. She is now in her third year of teaching and hopes to found a charter school of her own one day. Daniel Clark met Mr. Andrew when he was 10 years old, after he and his father moved to Harlem, talked about how Mr. Andrew pushed him to succeed at Democracy Prep; how he convinced Mr. Clark, at only 12 years old, to speak on a panel at Harvard, an experience Mr. Clark identified as causing him to feel empowered and confident in the future.
And Mr. Andrew encouraged Mr. Clark to apply for the junior Fulbright scholarship in South Korea, and he in fact would be accepted into that program. Mr. Clark just graduated from Vanderbilt and is now pursuing his master’s at Columbia University.
Mary Pannell, whose daughter, a graduate of Democracy Prep, received a $250,000 scholarship to Duke. She attributes her daughter’s success to Mr. Andrew’s mentorship and the education she received at Democracy Prep.
In addition to these success stories, there has been an overwhelming outpouring of support for Mr. Andrew from family members, longtime friends, former colleagues, people who have known Mr. Andrew since their teenage years, when they were congressional pages together.
As Mr. Kim mentioned, many of these letters came from people who encountered Mr. Andrew outside the professional context and dealt with him when no one was watching, like his building superintendent.
And a few common themes populate those letters: Mr. Andrew is someone who is there for family and friends, someone who’s cared for others, someone who can be relied on in their darkest hours; someone who was committed to addressing inequity in educational opportunity, someone who wanted to make a difference in the world.
These are admirable qualities, and many of these letters contain considerable detail of Mr. Andrew’s past that reflect those qualities. He also accepted full responsibility for his criminal conduct. In his very first appearance before me, he waived indictment and pleaded guilty.
Mr. Andrew also fulfilled his restitution obligation as well as his forfeiture allegation. And there have been no issues during the pretrial supervision. He was in compliance with all the conditions of his release. He has maintained a stable residence and has been actively seeking employment.
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I also have considered Mr. Andrew’s family responsibilities and the members of his family who will suffer as a result of his sentence. None of this is fair to them.
But as Mr. Finkel correctly noted when I asked him about this earlier today, the sad reality is that innocent family members are impacted and harmed in many if not most criminal cases.And sadly, Mr. Andrew is the only person responsible for them, that unfortunate impact.
And while I consider that impact, at the end of the day I must balance those considerations as well as the good Mr. Andrew has done with the very serious and deliberate nature of the criminal activity.
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I will now state the sentence I intend to impose. Mr. Andrew, will you please rise.
Mr. Andrew, it is the judgment of this Court that you are remanded to the custody of the Bureau of Prisons for 12 months and one day, to be followed by a period of three years of supervised release.
I conclude that this sentence is sufficient but not greater than necessary to achieve the purposes of sentencing for the reasons I just went through.
You are ordered to pay restitution in the amount of $218,005 to Democracy Prep Public School, which is a victim of the offense, although I understand from the government that you have satisfied this obligation.
I also order forfeiture with respect to Count One of the indictment, in line with the plea agreement. Under the plea agreement, it was agreed that if you paid $22,537.47 on or before today’s sentencing, your forfeiture obligation would be satisfied. And once again, I understand from the government that you have made this payment.
After considering the seriousness of this offense, Mr. Andrew’s ability to pay, and his compliance with his restitution and forfeiture obligations, I impose a fine in the amount of $5,000. I find this amount to be sufficient to ensure that the fine, along with the other sanctions, is punitive. The fine must be paid within one year of Mr. Andrew’s release from prison.
Lastly, I impose the mandatory special assessment of $100, which shall be due immediately.
I find the sentence sufficient but not greater than necessary to satisfy the sentencing purposes set forth in federal law, including the need to promote respect for the law, to provide just punishment for the offense, to afford adequate deterrence to the defendant and others, and to protect the public from further crimes of the defendant.
I will order in the judgment a surrender date no later than Sept. 22, 2022. I will include a recommendation for a designation to the Federal Correctional Institution, Otisville or otherwise in the New York City area.
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Mr. Andrew, I know the term of incarceration was not the sentence you were advocating for and hoping for. While your criminal conduct was not an isolated incident, it does appear to be a departure from much of the good work you’ve done for most of your life in the education sector.
But the crime was serious. It had a real victim and must be punished.
If you’ll indulge me for a couple of more moments, one of your students at Democracy Prep wrote that, among other things, you taught her what it means to be accountable, and you told her that in times of adversity, you have to use your struggles as a way of strength.
One day you’ll talk about how you’ll obtain this. I hope you take those words to heart.
Your sister wrote about your incredible acumen and intellect and that you still have much more to offer this world. I do believe that. When you are released from prison, I hope you make the right decision for yourself and your family and continue to be a productive and valuable member of society.
The letters I received made clear to me that you have a tremendous support network, and I have every reason to believe that you will succeed.