OIG Investigative Reports, Pittsburgh, PA., August 23, 2013 - Former CEO of PA Cyber Nick Trombetta and CPA Neal Prence Charged in Elaborate Fraud Scheme Skip to main contentAbout UsContact UsFAQs Language Assistance Englishespañol中文: 繁體版Việt-ngữ한국어TagalogРусский U.S. Department of Education Search for: Toggle navigation U.S. Department of Education Student Loans Grants Laws Data About ED OFFICES Home Reports & Resources Programs/Initiatives News Office Contacts Investigation Report THE UNITED STATES ATTORNEY'S OFFICE WESTERN DISTRICT OF PENNSYLVANIA NEWS Former CEO of PA Cyber Nick Trombetta and CPA Neal Prence Charged in Elaborate Fraud Scheme FOR IMMEDIATE RELEASE August 23, 2013 PITTSBURGH, Pa. - The former CEO of the Pennsylvania Cyber Charter School and his accountant have been indicted by a federal grand jury in Pittsburgh on charges of mail fraud, theft or bribery concerning a program receiving federal funds, tax conspiracy and filing a false tax return. The announcement was made today at a news conference by United States Attorney David J. Hickton; FBI Special Agent in Charge Gary Douglas Perdue; Akeia Conner, Special Agent in Charge of the IRS-Criminal Investigation - Philadelphia Field Office; and Steven Anderson, Special Agent in Charge, Department of Education Office of Inspector General - Mid Atlantic Region. The 11-count indictment, returned on Aug. 21, and unsealed today, named Nicholas Trombetta, 58, of East Liverpool, Ohio, and Neal Prence, 58, of Koppel, Pa. According to the indictment, Trombetta was the founder and Superintendent of the PA Cyber Charter School. Trombetta created 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. The indictment alleges that Prence, an accountant, assisted Trombetta in the tax fraud scheme. “As the founder and CEO of PA Cyber, Trombetta was a custodian of the public trust, receiving public funds,” said U.S. Attorney Hickton. “These charges reflect our obligation to protect the education of children, who are our future, and to protect the compact with hardworking taxpayers.” “Charter schools are funded with public money that is intended to help educate children in our communities,” stated FBI SAC Perdue. “When individuals enrich themselves with this 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.” “During a six-year period that began in 2006, Mr. Trombetta with the assistance of CPA Prence, concealed his position as the direct beneficiary and recipient of funds generated by PA Cyber,” said IRS-CI SAC Conner. “Mr. Trombetta exerted his influence to control the flow of funds and falsify corporate books and records, ultimately shifting more than $8 million in income attributable to him, to the federal income tax returns of other persons so as to conceal his true income from the IRS. The government must hold corporations and their executives accountable for their actions. It is for this reason that IRS Criminal Investigation continues to vigorously pursue corporate fraud and those individuals who employ illegal accounting practices for personal financial gain.” "Mr. Trombetta and Mr Prence knowingly and willfully abused their positions of trust for personal gain and did so at the expense of the educational development of children. That is unacceptable," said Steven Anderson, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Mid-Atlantic Regional Office. "Deservedly, Mr. Trombetta and Mr. Prence will now be held accountable for cheating Pennsylvania’s students." The law provides for a maximum total sentence of 100 years in prison, a fine of $3,250,000, or both for Trombetta and five years imprisonment, $250,000, or both for Prence. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. Assistant United States Attorneys James R. Wilson, Robert S. Cessar and Stephen R. Kaufman are prosecuting this case on behalf of the government. The Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigations and the U.S. Department of Education Office of Inspector General conducted the investigation leading to the indictment in this case. An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty. Top Printable view Last Modified: 08/26/2013 How Do I Find... Student loans, forgiveness College accreditation No Child Left Behind FERPA FAFSA 1098-E Tax Form 2015 Budget Proposal More > Information About... Transforming Teaching Family and Community Engagement Early Learning K-12 Reforms More > Connect Facebook Twitter YouTube Email RSS Google+ More > MISUSED FOIA OIG Fraud Hotline Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. Student Loans Repaying Loans Defaulted Loans Loan Forgiveness Loan Servicers Grants & Programs Apply for Pell Grants Grants Forecast Open Grant Competitions Find Grant Programs by Eligibility Laws & Guidance No Child Left Behind FERPA Civil Rights Data & Research Education Statistics Postsecondary Education Data State Education Data Nation's Report Card What Works Clearinghouse About Us Contact Us ED Offices Jobs News FAQs Budget, Performance Notices FOIAPrivacySecurityInformation qualityInspector GeneralWhitehouse.govUSA.govBenefits.govRegulations.gov
Former CEO of PA Cyber Nick Trombetta and CPA Neal Prence Charged in Elaborate Fraud Scheme. Pittsburgh, PA., August 23, 2013
Published by the Department of Education, Office of Inspector General on 2013-08-23.
Below is a raw (and likely hideous) rendition of the original report.