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PA Cyber condo deal in Florida raises questions

October 13, 2012
Morning Journal News

PITTSBURGH (AP) - A Florida condominium bought last year by the Pennsylvania Cyber Charter School's founder for $933,000, and then sold to a business created by one of the school's former executives for just $10, is back on the market, real estate agents said Thursday.

The four-bedroom, 4 1/2-bathroom house passed in December from PA Cyber CEO Nick Trombetta to Palatine Development LLC. That Ohio-based firm was created by former PA Cyber technology director Brett Geibel, who left the school in 2007, for a series of positions with direct or indirect vendors of the school.

A Palatine campus in Calcutta, was the scene in July of one of several searches by FBI and IRS agents, all part of a federal grand jury investigation believed to focus on former or current executives of PA Cyber.

It's not clear if the condo deal is part of the probe. Federal prosecutors would not comment Thursday. But the transactions surrounding the property in Bonita Springs defy normal primary school math.

The 3,829-square-foot house in the Villa Trevi at the Colony condominium, built in the Spanish Colonial Revival style, once sold for more than $1.4 million before the Florida real estate market crashed. After Trombetta bought and sold it, it was listed this month for $875,000.

When Trombetta bought it, in April 2011, he was PA Cyber's CEO, earning around $164,000 from that Beaver County-based school and reporting no other sources of income on state-required disclosure forms. He was previously the superintendent of the Midland Borough School District.

Trombetta, of East Liverpool, has had other roles, some of them paying. He was president of the National Network of Digital Schools Management Foundation, or NNDS, which provides management and curriculum to PA Cyber. He was an officer of the Lincoln Park Performing Arts Center, across the street from PA Cyber in Midland.

Most of his roles outside of PA Cyber ended after 2008, when the state Department of Education told the online charter school to eliminate any appearances of conflict of interest.

He left PA Cyber in June, but first built it into the state's largest online charter school, with more than 10,000 enrollees in grades K-12. It has a budget of more than $100 million a year made up almost entirely of tuition paid by the home districts of those students.

The Florida condo purchase wasn't accompanied by any mortgage in Trombetta's name, according to records on file in Lee County, Fla., which includes Bonita Springs.

"It more than likely was a cash transaction," said Justin Jordan, a partner in the real estate firm that represented the seller in the deal. He said he can't be certain of the precise method of payment, because the funds went directly from Trombetta to the sellers' lender.

In December, Trombetta sold the property to Palatine. The sale price listed on both the deed and Lee County records, $10, is an amount often written in when a sale is between family members, or when there was other consideration involved.

Such transactions are "commonly done between parents and children and other relationships," said Michael Angelo Maccagnan, an attorney at Angelo & Angelo, based in Hampton, who has Florida property. "You don't know that ($10 is) the actual consideration paid. Maybe it is, maybe it isn't.

"It's possible (the seller) got more membership shares of the LLC (as payment), but again, you're not going to know that. It's only going to be available in records of the LLC," Maccagnan said. Sometimes a person will essentially give a property to a limited liability corporation in return for services, he added.

Officials of the Villa Trevi at the Colony Condominium Association, which approved the sale, said they were not aware of any terms other than those listed on the deed. The association's manager said that a vendor conducted a background chec k on Palatine and concluded that it could pay the condo fees.

The Lee County assessor now values the condominium at $796,530, based on 2011 sales of comparable properties. The assessment files don't reflect any payment other than $10 between Trombetta and Palatine.

Palatine's creator, Geibel, is a longtime associate of Trombetta.

Geibel, of Leechburg, left PA Cyber to become a senior vice president at NNDS. In 2008, he helped found Avanti Management Group, an educational consulting group led entirely by former PA Cyber executives. Avanti's office sits on a Calcutta, Ohio, farm owned by Palatine.

The Calcutta farm was one of the sites searched by federal agents July 12. The federal grand jury investigation is secret, but it does not target the school itself.

Besides the Ohio land and the Florida condominium, Palatine owns a Piper Navajo airplane that was used frequently for flights around Pennsylvania and Ohio, and occasionally to South Carolina, until the date of the federal search. Since then it has only flown twice, from New Castle Municipal Airport to Arnold Palmer Regional Airport in Latrobe, and back, according to FlightAware, a flight tracking company.

In 2010, Palatine bought a three-bedroom house in Steubenville from Trombetta for $160,000.

Geibel did not respond to calls or notes left at several of his businesses and his home. Trombetta did not respond to calls or notes.

Florida real estate agent Dena Wilcoxen said Thursday that she has been hired to market the property. After checking with Geibel, she declined comment.



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