The board of the Pennsylvania Cyber Charter School voted Monday night to stop footing the bill for founder and former CEO Nick Trombetta's legal defense, in light of his indictment last month.
Board president Dave Jaskiewicz said the school's leaders decided in July 2012 to cover Mr. Trombetta's defense bills, though he had resigned the month before, because he had not then been accused of wrongdoing. The federal indictment, Mr. Jaskiewicz told the board, indicates that Mr. Trombetta "had reasonable cause to believe that his conduct was unlawful."
Neither he nor school chief executive officer Michael Conti knew precisely what the school spent on Mr. Trombetta's legal representation, led by former U.S. attorney J. Alan Johnson, but they said it was in excess of $200,000.
Board member Phillip Tridico voted against the motion to cut off the tab, and would not comment after the meeting. Members Tom Dorsey and Jayne Lingenfelder abstained. Four members voted for the motion.
The vote came after a closed-door executive session lasting almost an hour and a half.
Mr. Jaskiewicz said the school has also paid the legal bills of employees called as witnesses in the probe.
"To our understanding, basically, we're done," he said, adding that if an employee was called as a witness in the future the school would pay their lawyer.
Mr. Trombetta has pleaded not guilty to the 11 count indictment accusing him of using a series of companies to obtain, and avoid taxes on, some $990,000 in school funds. Mr. Johnson could not be reached late Monday.
Mr. Conti said the school has redoubled efforts to check up on vendors, working with its nonprofit education management organization, the National Network of Digital Schools, to improve background checking.
"Everyone is looking around the corner a second time before we move" on any new contracts, Mr. Jaskiewicz said.
The school has applied to the Internal Revenue Service for nonprofit status, Mr. Conti added.
"It's been a difficult year," he said. "We are preparing to do what we've always done, and that's to continue to make this school better for its students."
The Midland-based online school now has 10,345 students with nearly 1,000 more in the application stage. Students' home districts pay tuition to PA Cyber in amounts governed by a state formula.education - breaking - state
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