Cyber charter's former CEO agrees to plea deal in criminal case
The disgraced former CEO and founder of Beaver County-based Pennsylvania Cyber Charter School, the state's largest cyber charter, reluctantly admitted in federal court Wednesday that he turned it into his personal ATM and withdrew about $8 million.
Nick Trombetta, 61, pleaded guilty to conspiring to defraud the Internal Revenue Service from collecting income taxes. He faces up to five years in prison.
The millions that Trombetta spent on houses, a twin-engine airplane and other possessions came from tax dollars earmarked for education, U.S. Attorney David Hickton said at a news conference after the plea hearing.
“All of that money could have been put to educating children,” he said. He declined to comment on how much of the money the government hopes to recover.
Christina Zarek, spokeswoman for PA Cyber, declined comment.
Trombetta's attorney, Adam Hoffinger, frequently interrupted Assistant U.S. Attorney Stephen Kaufman as Kaufman recited the evidence the government had planned to present to a jury.
“I asked him not to turn this into a press conference,” Hoffinger told U.S. District Judge Joy Flowers Conti.
Kaufman said he was reading verbatim from the part of the 11-count indictment to which Trombetta had agreed to plead guilty.
The conspiracy involved Trombetta and several others moving about $8 million from PA Cyber in Midland to other companies created or controlled by Trombetta and filing false tax returns to make it look like the money was going to the other conspirators when it actually went to Trombetta, Kaufman said.
The government had to recite the facts that prove Trombetta committed the conspiracy before he could plead guilty to it, the judge told Hoffinger. After further wrangling, the judge said, “I cannot take his plea.”
Her statement seemed to calm things down and, after a two-hour recess, the hearing resumed with the government reading a bare-bones account and Trombetta admitting he committed the crime.
When the judge asked him if he knowingly joined a conspiracy to defraud the government, Trombetta hesitated and then said, “By shifting income, your honor, yes.”
Conti scheduled his sentencing for Dec. 20 and allowed Trombetta to remain free on bond. Trombetta and his attorney declined comment after the hearing.
The investigation became public in July 2012 when agents searched Trombetta's office at the school. He had resigned his post a month earlier.
PA Cyber's reputation and its students have suffered as a result of Trombetta's crime, said Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools.
After Trombetta was charged, the school was audited and came under additional scrutiny.
“The whole question of accountability and the stewardship of financial resources came into question,” Fayfich said. “It wasn't the school that was the problem, but they were painted with that brush.”“People who don't like charter schools tend to generalize. That nuance is lost in the discussion, sometimes intentionally.”
At its height, Trombetta's empire included the cyber charter school, a traditional charter school, a performing arts center and several companies that provided services to charter and cyber charter schools.
His impact on Midland was undeniable. When Trombetta was charged, then-council President Paul Anthony told the Tribune-Review, “He brought employment to a dying steel town and to a region that needed it. We can't say thanks enough.”
Anthony said he still believes that.
“I'm just glad that this is behind Dr. Trombetta,” Anthony said Wednesday.
About an hour before Trombetta finalized his plea, Gov. Tom Wolf announced that the state Department of Education had established a new division to monitor the finances and academic performance of charter and cyber charter schools. The timing of the announcement was coincidental, said Casey Smith, a spokeswoman for the education department. She declined comment on Trombetta's case.
Trombetta's sister, Elaine Trombetta Neil, pleaded guilty in October 2013 to filing a false tax return on her brother's behalf.
A likely government witness if her brother had gone to trial, Neil's sentencing has been rescheduled several times and is set for Nov. 9. Neal Prence, Trombetta's accountant, is scheduled to stand trial Sept. 19 on charges that he aided Trombetta in the tax conspiracy.
Staff writer Liz Behrman contributed. Brian Bowling is a Tribune-Review staff writer. Reach him at 412-325-4301 or firstname.lastname@example.org.