New York Hasidic School Admits to Benefit Fraud Conspiracy, Agrees to …

Posted By on November 6, 2022

A Hasidic school in Brooklyn,New York, has agreed to pay$5 million in penalties to resolve aninvestigation into its allegedly fraudulent conduct, including the illegaluse of millions of dollars of government funding for entirely fictitious programs,according to the Department of Justice.

The Central United Talmudical Academy in Brooklyn (CUTA),which serves more than4,600students in Williamsburg, agreed to pay $5 million in penalties, in addition to over $3 million in restitution it has already paid out, prosecutors announced on Oct. 24.

The school agreed to the terms of athree-year deferred prosecution agreement with the government on Monday after it admitted to being involved in several overlapping frauds, including a multi-million dollar scheme to wrongfully obtain funds designated to feed needy schoolchildren, prosecutors said.

According to the New York Times, CUTA is thelargest private Hasidic school in New York.

Prosecutors allege that between2014 and 2016,CUTA received more than $3.2 million in reimbursement for a meal program that was meant to help feed students at the school.

However, the program was almost entirely fictitious, prosecutors said, and instead of using the funds to feed the children, the school allegedly utilized it for other things, including holding parties for adults. According to the DOJ, the school fabricated records and lied to government agencies to cover up the alleged scam.

Additionally, law enforcement officers who were investigating theallegedly fraudulent conduct also discovered that the school and its employees had utilized a number of otherpayroll practices to help them commitbenefit and tax fraud.

Prosecutors claim the school grossly underrepresented employees income, thus enabling them to claim public health benefits such ashealth care and childcare that they were not entitled to, and thuscommit welfare and other benefits fraud.

This was done by paying workers in cash and handing them coupons that could be redeemed at local stores, according to the DOJ. The stores would thenredeem the coupons with the school to receive payment, thus creating a secret underground economy inwhich employees obtained usable income unknown to the government.

Additionally, the school allegedly providedno-show jobs that allowed some individuals to fraudulently claim tax exemptions and also obtainedtechnology funding but used the money for something other than the childrenseducational purposes, prosecutors said.

They also allegedly provided childcare services without proper licenses.

Mondays million-dollardeferred prosecution agreement comes afterthe schools former executive director,Elozer Porges, was sentenced to two years in prison in 2019 after pleading guilty in March 2018 for her role in the allegedconspiracy to defraud the government.

Her assistant,Joel Lowy, also pleaded guilty and was sentenced to five years probation, 1,000 hours of community service, and $98,407.21 in restitution in April 2022.

The DOJ said that the school has undertaken remedial efforts and significant structural changesover the past several years, includingapplying a zero-tolerance policy to such behavior cited by prosecutors,replacing its executive management team, developing and implementing a set of financial and procedural controls, and creating anoversight board.

It has also conducted audits to ensure it remains compliant. As part of Mondays agreement, an independent monitor will assess the schools compliance for a period of three years while also ensuring itcontinues to follow its legal and ethical obligations, the DOJ said.

The misconduct at CUTA was systemic and wide-ranging, including stealingover $3 million allocated for schoolchildren in need of meals, said Breon Peace, U.S. Attorney for the Eastern District of New York on Monday. Todays resolution accounts for CUTAs involvement in those crimes and provides a path forward to repay and repair the damage done to the community, while also allowing CUTA to continue to provide education for children in the community.

Alawyer representing the yeshiva, Marc Mukasey, told the court on Monday that school officials will collaborate with the government to ensure it meets theobligations under the agreement, the New York Timesreports.

The Central United Talmudical Academy could not be reached for comment.


Katabella Roberts is a news writer for The Epoch Times, focusing primarily on the United States, world, and business news.

See the article here:

New York Hasidic School Admits to Benefit Fraud Conspiracy, Agrees to ...

Related Posts


Comments are closed.

matomo tracker