Founder of Cyber Charter School pleads not guilty to fraud, conspiracy
The federal government wiretapped at least one phone in its investigation of cyber school leader Nick Trombetta and his accountant, and gathered so much evidence, it needed a database to track it.
Assistant U.S. Attorney Robert Cessar told a federal magistrate on Wednesday that his office would share CDs of evidence and the database with lawyers for Trombetta and his accountant, Neal Prence of Koppel.
Court papers Cessar filed after an arraignment in U.S. District Court, Downtown, show one CD contains recordings from a wiretap on a phone with a 724 area code. It does not indicate the phone's owner, and the number is not accepting calls.
The papers show Trombetta spoke with FBI agents and the Internal Revenue Service interviewed Prence in July 2012, more than a year before a grand jury last week indicted the pair on charges connected to fraud involving the state's largest cyber charter school and tax money.
Trombetta, 58, of East Liverpool, Ohio, who founded Pennsylvania Cyber Charter School in 2000, pleaded not guilty to charges that he used the school and a string of spinoffs to pad his pockets with nearly $1 million.
Prence, 58, pleaded not guilty to tax conspiracy charges. Prosecutors say he prepared false tax returns for Trombetta and leaders of two shell companies to help hide $8 million from the IRS over six years, of which at least $990,000 went to Trombetta.
Both men remained silent through a five-minute arraignment before Chief U.S. Magistrate Lisa Pupo Lenihan and while reporters questioned them and their attorneys as they left the courthouse.
“We just pleaded not guilty. That's what there is to know,” attorney J. Alan Johnson said when pressed for comment.
Before the hearing, Trombetta hugged Prence and shook hands with prosecutors who want the once-honored school leader to forfeit the nearly $1 million they say he took for homes, food and travel.
U.S. Attorney David Hickton last week described an intricate fraud mostly involving tax money. Charter schools such as PA Cyber collect money from school districts in which their students live.
Prosecutors say Trombetta, who left the Midland school last year just before agents searched his office there and related offices, formed the shell companies, one2one and Avanti Management Group, to move money from the school and to bilk money from online education programs in Ohio and New Mexico.
He used the money, they said, to buy property, including a $900,000 condo in Florida and his girlfriend's home in Ohio, a $300,000 airplane, to pay for groceries and to eat at restaurants.
It's unclear how much money is left. Phone numbers for Avanti are disconnected.
Hickton said Trombetta and Prence planned to move the last bit of money from Avanti to a new shell company called Presidio around the time of the searches.
Trombetta went to work at Kuhn's Quality Foods as its personnel director. A woman who answered the company's phone declined to comment and hung up.
Prosecutors said employees of PA Cyber and a related nonprofit who did work that earned Trombetta money did not know about the scheme, and that PA Cyber did nothing wrong. Leaders of Avanti, who prosecutors say knew about Trombetta's activities, have not been charged.
Hickton said the investigation continues.
Trombetta and Prence remain free on bond. Johnson told Lenihan that he had Trombetta's passport and would surrender it.
David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or firstname.lastname@example.org.