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Feds want data protected in cyber fraud case

Saturday, Sept. 7, 2013, 12:01 a.m.
 

The federal government has some information in the Nick Trombetta case that is so sensitive that it doesn't want the public to know it exists, according to a court document filed Friday.

A federal grand jury on Aug. 23 indicted the founder of the Pennsylvania Cyber Charter School and his accountant, Neal Prence, on fraud and tax-evasion conspiracy charges. By law, prosecutors have to let the pair and their attorney see the evidence that will be used against them.

Assistant U.S. Attorney Stephen Kaufman filed a complex motion Friday that essentially asks U.S. District Judge Joy Flowers Conti to keep the contents of a second motion secret. The second motion, for a protective order, seeks to keep something else in the case secret.

Kaufman said the double layer of secrecy is warranted because the motion for the protective order “reveals a matter which should not be disclosed publicly” and even the reasons for keeping that matter secret shouldn't be disclosed.

University of Pittsburgh law professor David Harris said protective orders in criminal cases typically seek to shield either witnesses or protect ongoing investigations aimed at other people.

“With these protective orders, it's a guessing game,” he said.

It is unusual for the government to want to shield the reason that it's seeking the protective order, Harris said.

The U.S. Attorney's Office declined comment.

Trombetta, 58, of East Liverpool, Ohio, and Prence, 58, of Koppel pleaded not guilty last week and remain free on bond.

U.S. Attorney David Hickton said the pair committed an intricate fraud, mostly with taxpayer money, that used the school that Trombetta founded in 2000 and a string of spinoff companies to pad Trombetta's pocket with nearly $1 million.

Trombetta left the Midland school last year just before agents searched his offices at the school and elsewhere. He used the money for living and entertainment expenses and to buy property, including a condo in Florida, his girlfriend's home in Ohio and an airplane, prosecutors say.

Prence helped Trombetta and leaders of two shell companies prepare false tax returns that hid about $8 million from the Internal Revenue Service over six years, prosecutors say. The leaders of the shell companies have not been charged.

Hickton said the investigation continues.

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.

When Trombetta and Prence were arraigned last week, Assistant U.S. Attorney Robert Cessar said a tap on one phone yielded so much evidence that investigators set up a database to track it.

One use of a protective order is to prevent defendants and their lawyers from sharing information the government gathered on other people during an investigation.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.

 

 

 
 


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