Wednesday, August 28, 2013

Award-Winning Founder and Accountant Charged In $8 Million Fraud

By Gary Snyder

U.S. Attorney David Hickton called Nick Trombetta a thief, charging the award-winning educator with 11 counts of mail fraud, filing false tax returns and conspiracy. A grand jury indicted Trombetta and he was arraigned. Authorities charged his accountant, Neal Prence of Koppel, with preparing Trombetta's false tax returns.

Hickton outlined a complicated scheme that he said Trombetta designed to skim nearly $1 million for himself, often from work done by employees at Pennsylvania Cyber Charter School and the related National Network of Digital Schools Management Foundation, or NNDS. He said the scheme attempted to hide $8 million in cash and property from the Internal Revenue Service.
“He is charged with creating a series of connected for-profit and not-for-profit entities to siphon taxpayer funds out of PA Cyber and to avoid federal income tax liabilities,” Hickton said. “As the founder and CEO of PA Cyber, Trombetta was the custodian of the public trust, receiving public funds.”
Trombetta collected a $50-per-computer kickback on 11,000 laptops that PA Cyber bought from an unnamed company, the grand jury said.
The grand jury said PA Cyber and NNDS employees doing work for Buckeye Online School for Success, or BOSS, in Ohio and Wingspan New Mexico did not know Trombetta diverted the money to himself through one2one, which he operated with his sister, Elaine Neill.
Authorities charged Neill, 56, of Center on Aug. 2 with filing a false tax return. She's expected to plead guilty Oct. 8.
“When individuals enrich themselves with (public) money rather than act as stewards of the education funds entrusted to them, our communities and the children we are obligated to educate are the true victims,” said FBI Special Agent in Charge Gary Douglas Perdue.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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