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Feds search PA Cyber, say school not 'current target' of investigation

| Thursday, July 12, 2012, 2:38 p.m.

Federal agents served a search warrant on Thursday at the Pennsylvania Cyber Charter School in Midland, the largest cyber school in the state with more than 11,000 students.

The Department of Justice would not say what agents with the FBI, the Internal Revenue Service and the Department of Education were seeking there or at least three other locations where warrants were served.

In a statement, the Justice Department said the Beaver County school, founded in 2000, “is not a current target of this investigation.”

Founder Nick Trombetta, 57, could not be reached for comment. On June 30, he stepped down as the school's CEO, saying it was time to start a new chapter in his life.

In a statement, Trombetta's replacement, PA Cyber CEO Michael J. Conti, said that “staff fully cooperated with (federal) agents and will continue to cooperate throughout their investigation.”

The school employs 650 people.

“We have told our staff to do their best to concentrate on fulfilling their professional obligations to our students, while making sure that they comply with any further requests from government agencies involved in this investigation,” Conti added.

Agents served a search warrant for financial records at the National Network of Digital Schools, said Joseph Askar, solicitor for the nonprofit company based in Beaver.

Trombetta founded NNDS, which supplies online K-12 curriculum for more than 400 schools across the United States and provides management services for PA Cyber.

“They wanted to know who the vendors are, how long we've done business with them, copies of contracts,” Askar said. “We're going to fully cooperate with any and all agencies, and we have nothing to hide.”

Federal agents also served search warrants at Prence Accountants LLC in Koppel in Beaver County, and at an undisclosed location in Ohio. Trombetta lives near East Liverpool, Ohio. A Justice Department spokeswoman declined to elaborate.

No one returned phone messages left at Prence.

IRS Special Agent Andrew Hromoko would say only that agents were there “on official business.”

None of PA Cyber's 11 board members could be reached for comment.

The school operates on a budget of $123 million, funded largely by tuition paid by public school districts for their students enrolled there.

Trombetta also founded the Lincoln Park Performing Arts Center six years ago in Midland, where more than 550 students from 58 school districts attend classes. Officials there could not be reached.

Many people in Midland credit PA Cyber and the performing arts center with reviving the Ohio River town of about 2,600 residents, which fell on hard times with the collapse of the steel industry.

In 2006, a state grand jury investigated allegations of double billing, excessive management fees, questionable payments to building contractors and misuse of taxpayer dollars at PA Cyber. Michael Barney, the chief executive of Rodis LLC, which then handled business affairs for the cyber school, had questioned the way it spent money.

He could not be reached for comment on Thursday.

PA Cyber has met state standards under the federal No Child Left Behind Act for three consecutive years.

State Auditor General Jack Wagner, who has been pushing to change how the state funds charter and cyber charter schools, said he was not aware of an investigation.

“Generally, Pennsylvania Cyber has an excellent reputation,” Wagner said. “I do know that the performance of children at Pennsylvania Cyber Charter has been one that has met the standards of education in Pennsylvania.”

Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or bvidonic@tribweb.com.

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