FBI, IRS Search Offices of Pa. Cyber School

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Federal agents executed a series of search warrants Thursday at Pennsylvania Cyber School offices in Beaver County and at several other locations in Pennsylvania and Ohio in connection with an ongoing investigation that authorities would not specify.

Agents from the FBI, the criminal investigation division of the IRS and the U.S. Department of Education's inspector general's unit searched the school's executive office at 1200 Midland Ave. in Midland along with an accounting firm in Koppel and several other locations.

The U.S. attorney's office in Pittsburgh said in a statement only that the searches are part of an investigation and that the cyberschool, "as an entity, is not a current target of this investigation."

In at least one location, Prence Certified Public Accountants in Koppel, IRS and FBI agents were seen carrying boxes out of the building.

Federal authorities refused to comment further on the case.

The cyber school reiterated the U.S. attorney's statement that it is not a target.

CEO Michael J. Conti said in a release that federal agents presented warrants for records at several locations and that the employees have cooperated.

"We have told our staff to do their best to concentrate on fulfilling their professional obligations to our students, while making sure that they comply with any further requests from government agencies involved in this investigation," he said. "We have a strong and committed team, and I have no doubt we will continue doing what we do best—providing a top-notch education to our diverse and talented student body."

The school is the largest cyber school in the state and enrolled more than 11,300 students in 2011-12.

Founder and former CEO Nick Trombetta, 57, who five years ago faced scrutiny from a state grand jury over how finances were handled at the school, announced in May that he was leaving to "try something else."

He said he would focus on writing and speaking engagements in promoting school choice.

He did not return a message left Thursday at his home in East Liverpool, Ohio.

Mr. Trombetta, former superintendent of the Midland Borough School District, started planning the cyber school in 1998 after no other districts would take students from Midland, which closed its high school in 1985 because of declining enrollment.

The cyber school opened in 2000 with 527 students and $2.9 million in revenue and now has offices in Allegheny County, Greensburg, Harrisburg, State College, Allentown, Erie and Philadelphia.

Cyber school students take classes from home under the direction of teachers at other locations, and PA Cyber receives millions in state funding for students from around the state.

The use of those taxpayer funds is the subject of the federal investigation.

Over the years, Mr. Trombetta has been lauded and criticized for his school and related projects.

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Supporters praise him for generating jobs and hope in downtrodden Midland, which suffered after its main employer, Crucible Steel, shut down in the 1980s.

Detractors have said he created an empire with money that is supposed to be used for student education.

The results of the state grand jury probe in 2007 aren't known, but witnesses testified for several months.

At the time, Mr. Trombetta declined to discuss the investigation but suggested jealousy over his success was at the root of the criticism because his school presented a threat to the traditional education system.

"No one who challenges a system that has been unchallenged for so long is going to go away unscathed," he said at the time. "We are under the microscope, and we should be."

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