PITTSBURGH - The federal investigation that led to the indictment last month of Pennsylvania Cyber Charter School founder Nick Trombetta started with two inside sources and spread to include inquiries into transactions involving about 20 businesses and nonprofits with which he had dealings, according to records unsealed Thursday morning.
According to published reports, a 68-page affidavit and search warrant application signed on July 11, 2012, by U.S. Magistrate Judge Robert C. Mitchell indicates that months earlier, two of Trombetta's associates approached the FBI through their lawyers.
They are identified in the affidavit as the chief executive officer and president of Avanti Management Group. Records indicate that former PA Cyber executives Brett Geibel of Leechburg, Pa., and Betty Jane Price of East Liverpool, Ohio, held those posts at that time.
Both sources were granted court-approved immunity on July 5, 2012, according to the affidavit.
In the affidavit, an FBI agent and an IRS agent sought and got authority to search Trombetta's office at PA Cyber's Midland headquarters and that of his then-secretary, Brenda Smith; the Koppel office of his accountant, Neal Prence, who was also indicted last month; the homes of Trombetta's mother, and his sister, Elaine Trombetta Neill, who faces tax charges; and the East Liverpool, Ohio, office of Avanti.
According to the reports, the affidavit - from which several pages were redacted - described the agents' belief that money flowed from PA Cyber to the nonprofit National Network of Digital Schools, which had a contract to manage the cyber charter school for 12 percent of its receipts and provide curriculum for tens of millions of dollars more.
Then Avanti got 13 percent of NNDS's receipts, for little real service, according to the document.
Because Trombetta seemed to control all three entities, the agents characterized his role as "a pattern of undisclosed self-dealing," the reports state.
"Trombetta directed Avanti to purchase a plane (which he uses far more than anyone else), to purchase his luxury vacation home in Florida (which he still uses), to purchase his former girlfriend's residence, and to purchase at least one vehicle for his personal use," the agents wrote.
He also had an Avanti credit card, they wrote.
"During the spring break season of 2012 Trombetta required Avanti to pay for air transportation for Trombetta's daughter and two friends to travel to the (Florida) condo for spring break," the agents wrote.
He also used the the property to entertain personnel from Franciscan University of Steubenville, from which he was seeking a contract, they wrote.
He used the plane in part to travel with friends to Steelers away games, according to the affidavit.
He instructed Avanti to buy a home in Mingo Junction, Ohio, for "his then girlfriend, Kelli Dicarlo," the agents wrote.
Trombetta planned to bring Midland School District Superintendent Sean Tanner in as Avanti's owner after his retirement, according to the affidavit.
Search warrant returns also unsealed Thursday show that agents took documents from Elaine Trombetta Neill's house related to NNDS, Avanti, a consulting firm she ran called One2One Enterprises and other businesses.
Similarly, they found documents in Trombetta's and Smith's offices at PA Cyber related to numerous businesses.
The warrants indicate the agents were looking for documents related to One2One, Avanti, NNDS, Prima Childcare, Prima Learning Center, Palatine Development, Martlin Management, Castlebrook Development Group, Castlebrook Management, the National Cyber School Management Corp., Presidio Inc., the Ohio-based Buckeye Online School for Success, Kellaur Corp., Digital Print Shoppe, Pioneer Charter School, Kaktas Consulting, NCS Technologies, Franciscan University of Steubenville and Beaver County Homes.
Trombetta has pleaded not guilty to an 11-count indictment accusing him of using a variety of businesses to illicitly obtain around $990,000 in funds that flowed to the school.
The school is funded almost entirely through tuition paid by the home districts of more than 10,000 students who have chosen its online educational model.
Prence has also pleaded not guilty.