Former Online Charter CEO Charged with Misusing Funds

Nicholas Trombetta, the former CEO of the Pennsylvania Cyber Charter School, has been charged with misusing funds, according to Stacy Teicher Khadaroo of The Christian Science Monitor. Trombetta has been indicted for diverting more than $8 million of taxpayer money away from the school for a condo, an airplane, and other personal expenses. He also collaborated with his accountant to avoid paying taxes.

Trombetta is accused of “funneling money to himself through Avanti Management Group, a for-contract company that did contract work for the National Network of Digital Schools that manages the school.”

“Prosecutors allege that Avanti had four straw owners whom Trombetta paid off so he could gain de facto control of the company.” US Attorney David Hickton, who announced the charges, was careful to note that “we are not indicting PA Cyber or cyber-education.”

The Pennsylvania Cyber Charter School serves more than 10,000 students and is the largest of the state’s 16 online charter schools. The charter school was founded by Trombetta in 2000.

Trombetta resigned last June and “an internal evaluation and restructuring of our senior administrators” has enabled the school to maintain a strong reputation, the school’s CEO, Michael Conti, said in a statement.

The Trombetta indictment drew attention to a concern that online charter schools have developed “so rapidly that accountability measures have not kept up, leaving the door open to a range of unethical and perhaps even criminal activity.”

“The virtual schools are just much more ripe for corruption because [of] the profit margins,” says Gary Miron, professor of education at Western Michigan University, who co-authored a report this year on virtual schools for the National Education Policy Center at the University of Colorado, Boulder. Not only did many virtual schools do less well on academic metrics, but “we could not track where the money was going,” Professor Miron says. Because many of the schools are run by or subcontracted to for-profit companies, “a lot of details go behind the veil of privacy [and] proprietary issues.”

According to Miron, Pennsylvania and Ohio have some of the highest per-pupil funding levels in the country for virtual charter schools.  In the United States, about 2 million students take online K-12 courses and more than half the states offer virtual schools, many of them authorized through the charter systems that set up autonomous public schools.

“Virtual schools are being promoted as a less expensive way to provide public education and to customize education for individual students … but these opportunities are being expanded without sufficient monitoring mechanisms in place,” says Patte Barth, director of the National School Boards Association’s Center for Public Education. Some students start an online program and then drop out a few months later but aren’t reported by the virtual school in their data, for instance, she says.

Steve Robinson, a spokesman for the Pennsylvania School Boards Association, said that in Pennsylvania, legislative plans have been made to require charter schools to have the same kinds of annual audits and fund-balance caps that traditional public schools have.