The founder of one of Pennsylvania’s most successful cyber charter schools is facing federal charges of fraud for scheming taxpayer funds out of the school, according to a grand jury indictment.
The 41-page indictment claims Nicholas Trombetta, 58, of East Liverpool, Ohio, the founder of Pennsylvania Cyber Charter School, shifted more than $8 million in Trombetta’s income between 2006 and 2012 to others to hide his true income.
The indictment also names Mark Prence, 58, of Koppel, Trombetta’s accountant, as a defendant.
Trombetta created a series of for-profit and non-profit entities “to siphon taxpayer funds out of PA Cyber and to avoid federal tax liabilities,” said David Hickton, U.S. attorney for the Western District of Pennsylvania, in his remarks during a Friday press conference announcing the indictment.
One of the people he shifted the money to was his sister, Elaine Trombetta Neill, according to the indictment.
Hickton said Trombetta also funneled about $990,000 for his own personal use from the entities.
In addition to the tax fraud, Hickton said Trombetta also ran a “kick-back” scheme. The indictment charged that he received payments of more than $550,000 in “kick-backs” for computer sales and contracts to Pennsylvania Cyber Charter School from 2009 to 2011.
The grand jury indictment came down Wednesday, but was unsealed Friday, federal officials said.
Trombetta founded the school in 2000 and it currently has about 11,000 students, Hickton said.
Trombetta faces three counts of mail fraud, three counts of theft or bribery concerning a program receiving federal funds, one count of tax conspiracy and five counts of filing a false tax return.
The penalties call for a maximum 100 years in prison for Trombetta and a $3.25 million fine, Hickton said. Prence faces up to five years and a $250,000 fine.
Both Trombetta and Prence surrendered to FBI officials Thursday and are free on $50,000 unsecured bail, according to court papers. An arraignment for both is scheduled for Wednesday.
Neill was charged on Aug. 2 with filing a false tax return and is expected to plead guilty Oct. 8, Hickton said Friday.