Federal prosecutors have indicted a School of Education alumnus, who was awarded by the University for his accomplishments, with charges including tax fraud and misusing government funds for his statewide-recognized cyber school.

A federal grand jury indicted Nicholas Trombetta, founder and retired chief executive officer of the company PA Cyber Charter School, on Friday. The 11-count indictment charges that Trombetta, assisted by his accountant, Neal Prence, created connected entities that functioned to funnel taxpayer funds out of PA Cyber and avoid federal income tax liabilities.

PA Cyber Charter School provides an online K-12 curriculum for students in the state. Like other charter schools, it receives funding from school districts where the students reside, as well as the Pennsylvania State Department of Education and the U.S. Department of Education. It was founded by Trombetta in 2000.

According to a statement the office of U.S. Attorney for the Western District of Pennsylvania David Hickton released Friday, Trombetta allegedly diverted more than $8 million from the company over a six-year period that began in 2006.

Although the charges, if proved true, will cast a shadow over Trombetta and his PA Cyber Charter School, the man and his enterprise were still well-respected in 2012 when Pitt’s School of Education publicly honored him.

In March 2012, Trombetta received the School of Education’s Pre K-12 Educator Award for his achievements in education. Trombetta obtained a doctorate degree from the School of Education in 2000, making him eligible for the Alumni Awards program. 

Pitt spokesman John Fedele declined to comment on the allegations against Trombetta.

Alan M. Lesgold, dean of Pitt’s School of Education, presented the award to Trombetta on March 23, 2012. At the time, the school had seen no evidence that he was anything but a respected educator. Lesgold denied knowledge of Trombetta’s connection to any alleged criminal activity when he presented the award to Trombetta in 2012.

“We certainly would not knowingly give an award to someone who did not lead an exemplary ethical life,” Lesgold said in an email.

Awards are issued by a small committee that includes alumni of the School of Education. Trombetta was nominated by department chairs and other alumni in order to be considered. Usually, only one person receives this award each year, depending on the number of nominees.

The criteria for the award include more than 10 years of experience in Pre K-12 education in addition to personal achievement, public service and a continued commitment to the advancement of the School of Education and the University of Pittsburgh.

“He seemed to be widely respected as a colleague by superintendents in western Pennsylvania, based upon my observations at superintendent events that Pitt tries to support,” Lesgold said. 

Hickton said the state pursued the charges against Trombetta because of the damage it inflicted on Pennsylvania citizens. 

“As the founder and CEO of PA Cyber, Trombetta was a custodian of the public trust, receiving public funds,” Hickton said. “These charges reflect our obligation to protect the education of children, who are our future, and to protect the compact with hardworking taxpayers.”

Prence is charged with helping Trombetta in these activities. The two men allegedly concealed where the funds were going by falsifying corporate books.

Trombetta created connected for-profit and not-for-profit entities to conceal the source and amount of his income so he could evade taxes, according to the indictment. He founded the National Network of Digital Schools in 2005 to manage PA Cyber. Trombetta served as superintendent at PA Cyber and president at NNDS. He later stepped down from his position as president in June 2007. In 2003, Trombetta co-founded the Buckeye Online School for Success, known as BOSS. In 2006, he founded One2One Enterprises with his sister, Elaine Trombetta Neill. In 2008, Trombetta created the Avanti Management Group, a for-profit consulting company that provided education management support. 

Trombetta retired as the chief executive officer of PA Cyber in June 2012. The following month, the FBI raided its offices, according to Christina Zarek, a spokeswoman for NNDS who also speaks for PA Cyber Charter School. She said the investigation surrounding Trombetta’s supposed activities went public shortly after his retirement.

Trombetta and Prence have been released on $50,000 unsecured bond. Their attorneys pleaded not guilty on behalf of their clients at the arraignment Wednesday morning. Chief U.S. District Judge Joy Flowers Conti was assigned the case.

Trombetta faces a maximum sentence of 100 years in prison and a $3.25 million fine. Prence faces up to five years in prison and a $250,000 fine.

Neill is expected to plead guilty in October to filing a false tax return. In August, she was charged with reporting her brother’s income on her own tax return to mislead authorities about his income.

Zarek does not expect Trombetta’s actions to affect the school. She said that the school and administrations are considered victims of his supposed actions and were vindicated.

This article has been corrected from its original version. A previous version said that Elaine Trombetta Neill pleaded guilty in October. In fact, Neill is expected to plead guilty in October of this year. The Pitt News regrets the error.