In March 2019 and October 2019, Democracy Prep charter chain founder and former employee Seth Andrew stole a total of $218K from three Democracy Prep escrow accounts. He was able to do so because two years after leaving Democracy Prep (in 2017), Andrew still had access to his school email account and could falsely portray himself as still associated with the charter chain. Andrew also still had access to the escrow accounts because he remained listed on documentation related to those accounts. Finally, given that Andrew was able to steal funds from the third escrow account five months after he depleted the first two accounts, it is obvious that Democracy Prep officials failed to adequately monitor all of the chain’s bank accounts.
In my May 01, 2021, post on the situation, I surmised that Andrew may have believed that Democracy Prep would not competently monitor its finances, thereby causing him to believe that he could get away with the theft. Indeed, the complaint against Andrew details the passage of 14 months from the first thefts (March 2019) to the maturing of a six-month certificate of deposit (CD) that Andrew purchased using the stolen funds (May 2020).
To lock that stolen money up for six months and patiently wait for it to mature demonstrates a level of certaintly that no one would be coming for that stolen cash.
Examination of Democracy Prep’s tax forms from 2007 to 2018 shows that the charter chain struggled to manage its money and to keep a positive balance CONTINUE READING: Democracy Prep’s Fiscal Tottering | deutsch29: Mercedes Schneider's Blog
