The founder and former CEO of the Pennsylvania Cyber Charter School, which educates more than 11,000 Pennsylvania students, has been indicted by a federal grand jury.
Nicholas Trombetta stands accused of siphoning more than $8 million from the school through a network of profit and non-profit companies he controlled.
Trombetta, 58, of East Liverpool, Ohio, surrendered to authorities Thursday night on the charges announced Friday by federal authorities.
Trombetta allegedly bought a $1 million Florida condominium and houses for his girlfriend and mother, along with nearly $1 million on personal expenses, including groceries.
Trombetta and his lawyer did not immediately return calls seeking comment about the charges.
Prosecutors allege Trombetta tucked most of the money in a shell company for his retirement.
Federal authorities hadn't commented about the investigation since seizing records from the Pennsylvania Cyber Charter School, its management firm and a for-profit consulting firm, all founded by Trombetta, last year.
Trombetta resigned from the school in June 2012 and has refused several requests to comment since.
The Midland, Beaver Co.-based school, which has offices in Allentown and Philadelphia, is not targeted and has been cooperating with investigators, school officials said.
"Even though the Department of Justice said from the outset that Pa. Cyber itself was not a target of the investigation, we conducted an internal evaluation and restructuring of our senior administrators to assure out school was performing in a manner that maintains its strong reputation among state education officials, the general public, and our students and their families," said Michael J. Conti, the Pennsylvania Cyber Charter School's current CEO, in a statement Friday.
Still, the school has had its own woes. Four top administrators were fired last September.
The solicitor of the charter school, Robert Masters, said last year that the firings had "absolutely nothing" to do with the investigation of the school's finances and those of the National Network of Digital Schools, a nonprofit Trombetta created that performs services for the cyber charter school, including managing the school and providing its curriculum. The nonprofit derives most of its income from the school.
Trombetta's sister, Elaine Trombetta Neill, of Aliquippa, was charged this month with filing a 2010 federal tax return that included "income that was properly attributed to a relative," who was not identified in court documents.
Neill filed the return as the registered owner of a business called One 2 One. According to court documents, Neill told investigators that business had deductible expenses of more than $90,000 even though federal prosecutors contend the business had "almost no legitimate business expenses."
Neill and her attorney have declined to comment.