Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Cyber School Probe Began with Insider Tips

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Cyber School Probe Began with Insider Tips

Article excerpt

The federal investigation that led to the indictment last month of Pennsylvania Cyber Charter School founder Nick Trombetta started with two inside sources and spread to include inquiries into transactions involving about 20 businesses and nonprofits with which he had dealings, according to records unsealed today.

A 68-page affidavit and search warrant application signed on July 11, 2012, by U.S. Magistrate Judge Robert C. Mitchell indicates that months earlier, two of Mr. Trombetta's associates approached the FBI through their lawyers.

They are identified in the affidavit as the CEO and president of Avanti Management Group. Records obtained by the Pittsburgh Post- Gazette indicate that former PA Cyber executives Brett Geibel and Betty Jane Price held those posts at that time.

Both sources were granted court-approved immunity on July 5, 2012, according to the affidavit.

In the affidavit, an FBI agent and an IRS agent sought and got authority to search Mr. Trombetta's office at PA Cyber's Midland headquarters and that of his then-secretary, Brenda Smith; the Koppel office of his accountant, Neal Prence, who was also indicted last month; the homes of Mr. Trombetta's mother and his sister, Elaine Trombetta Neill, who faces tax charges; and the East Liverpool, Ohio, office of Avanti.

The affidavit - from which several pages were redacted - described the agents' belief that money flowed from PA Cyber to the nonprofit National Network of Digital Schools, which had a contract to manage the cyber charter school for 12 percent of its receipts and provide curriculum for tens of millions of dollars more.

Then Avanti got 13 percent of NNDS's receipts, for little real service, according to the document.

Because Mr. Trombetta seemed to control all three entities, the agents characterized his role as "a pattern of undisclosed self- dealing. …

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