The founder and former chief executive of Pennsylvania’s largest cyber-charter school is now facing charges of siphoning more than $8 million from the school through a network of companies, then scheming with his accountant to avoid income taxes.
Nicholas Trombetta surrendered to the FBI Thursday. The charges stem from his tenure at The Pennsylvania Cyber Charter School, which he founded in Midland in 2000, and from which he drew an annual salary between $127,000 and $141,000 during the years covered by the indictment, 2006 to 2012.
“As the founder and CEO of PA Cyber, Trombetta was a custodian of the public trust, receiving public funds,” from local school taxes, state and federal subsidies, U.S. Attorney David Hickton said.
Trombetta’s attorney didn’t return calls and emails for comment.
Trombetta manipulated companies he created and controlled to draw additional money from the school, which he spent on himself, real estate and a $300,000 plane, Hickton said.
Trombetta bought a Bonita Springs, FL, condominium for $933,000, paid $180,000 for houses for his mother and girlfriend in Ohio, and spent $990,000 more for groceries and personal expenses, Hickton said.
The rest of the money funneled through Avanti Management Group, which Hickton said acted like Trombetta’s “savings account, or rather, his retirement account.”
Avanti was a for-profit company that did contract work for the National Network of Digital Schools, a nonprofit that managed the cyber-charter school and developed its curriculum.
Avanti had four “straw” owners who pretended to hold 25 percent of the company, but instead were each paid $500,000 each to relinquish all but a 5-percent stake each. That gave Trombetta 80 percent ownership and de facto control of the firm, the indictment said.
Trombetta, 58, of East Liverpool also stands accused of creating another company, Presidio Education Network, last July as federal agents were poring over his financial records, so he could move more than $3 million out of Avanti’s bank accounts.
Despite his misuse of PA Cyber and the National Network of Digital Schools — which continue to operate with new management since Trombetta resigned last June — Hickton said, “We are not indicting PA Cyber or cyber-education.”
In Pennsylvania, nearly 35,100 of the 1.7 million youngsters attending public schools go to cyber-charter schools. With more than 11,000 students, PA Cyber is by far the largest of the state’s 16 such schools.
Trombetta’s accountant, Neal Prence, also faces charges, but Hickton wouldn’t comment on the extent of his involvement in the overall scheme. Prence, 58, of Koppel, faces charges of conspiring with to help Trombetta avoid income taxes, including by filing false tax returns.
Defense attorney Stanton Levenson said Prence maintains he did nothing wrong and plans to plead not guilty when both men end up arraigned Wednesday.