PA Cyber Charter School founder Trombetta pleads not guilty to fraud, tax charges


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Nick Trombetta, who founded the Pennsylvania Cyber Charter School and turned it into the state's top online educational institution, pleaded not guilty Wednesday to 11 criminal charges related to alleged diversion of $990,000 in public educational funds to private uses.

Also pleading not guilty was Mr. Trombetta's former accountant, Neal Prence.

Although few details were provided at the arraignment, a list of materials filed by prosecutors hinted at the scope of the probe.

The list indicated that Internal Revenue Service investigators interviewed Mr. Prence on July 12, 2012 -- the same day agents searched offices of the school and related entities -- and twice on the day after. The accountant, based in Koppel, Beaver County, faces one tax conspiracy charge.

"His initial posture was that he had no problem sitting down and speaking to anyone from the government, because as far as he was concerned he did nothing wrong," said Mr. Prence's attorney, Stanton Levenson.

"He is mystified that he is a defendant in this case," Mr. Levenson said. "He fully intends to go to trial."

Such a trial could last seven weeks, the attorneys estimated. The case was assigned to U.S. District Judge Joy Flowers Conti.

The Federal Bureau of Investigation interviewed Mr. Trombetta on the day of the searches.

Mr. Trombetta's attorney, J. Alan Johnson, had little to say. "He's pled not guilty," he said. "That's as all-encompassing as I can be."

Mr. Trombetta is charged with mail fraud, theft or bribery concerning a program receiving federal funds, tax conspiracy and filing a false tax return.

The list indicated that prosecutors will provide the defense with CDs of recordings of conversations made with the consent of unnamed participants, and captured on wiretaps. Assistant U.S. Attorney Robert Cessar told U.S. Magistrate Judge Lisa Pupo Lenihan he will give the defense a database of the documents assembled by FBI and IRS investigators.

Mr. Trombetta founded the Midland-based school, which boasts more than 11,000 students and a budget of $115 million in tuition paid by the students' host districts. He led the school until last spring.

According to the 41-page indictment handed down by a grand jury last week, Mr. Trombetta created, or caused others to create, nonprofit and for-profit entities into which PA Cyber funds flowed. Some of the money went to him for personal use, or was used to buy an airplane, a Florida condominium and homes for him and his girlfriend, according to the indictment.

Mr. Trombetta's sister, Elaine Trombetta Neill, is scheduled to plead guilty in October to one count of filing a false tax return in relation to a consultancy the two created, called One2One Enterprises.

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Rich Lord: rlord@post-gazette.com, 412-263-1542 and on Twitter: @richelord. First Published August 28, 2013 2:30 PM


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