Hasidic school to pay $8 million after admitting widespread fraud

The largest Hasidic Jewish private school in New York state stole millions of dollars from various government programs in a year-long fraud, the school admitted in documents filed Monday in federal court .

The operators of the school, Central United Talmudical Academy, which serves more than 2,000 boys in Williamsburg, Brooklyn, have admitted illegally misappropriating money from government programs for school lunches, technology and childcare . They also admitted to creating no-show jobs for some employees while paying others cash and coupons so the employees could get welfare, according to a deferred suit agreement filed in US federal court. district of Brooklyn.

In total, the school agreed to pay $5 million in fines on top of the more than $3 million it had already paid in restitution as part of the deal to avoid prosecution.

“Today’s admission makes it clear that there was a pervasive culture of fraud and greed in place at ACTU,” said Michael J. Driscoll, deputy director in charge of the FBI’s New York office. , referring to the school by its initials in a statement on Monday. . “We expect schools to be places where students learn to do things right. ACTU leaders have gone out of their way to do the opposite, creating multiple fraud schemes to deceive the government.

As part of the fraud, school officials took money intended for feeding children and instead used it to subsidize adult parties, federal authorities said Monday.

A lawyer representing the school, Marc Mukasey, declined to comment. Other school officials did not immediately respond to phone and email messages seeking comment.

The federal investigation into the school’s use of government funding stems from a narrower criminal case in which two former principals, Elozer Porges and Joel Lowy, pleaded guilty in March 2018 for their role in the conspiracy aimed at defrauding the government.

Since that case, the school has replaced its management team and developed a new set of controls, among other changes, federal authorities said. As part of the agreement, the school will also be subject to the supervision of an independent monitor for the next three years.

“The misconduct at ACTU was systemic and wide-ranging, including the theft of more than $3 million from school children in need of meals,” Breon Peace, the U.S. Attorney for the Eastern District of New York, said Monday. York. “Today’s resolution acknowledges ACTU’s involvement in these crimes and paves the way for reimbursing and repairing the harm done to the community, while allowing ACTU to continue to provide education to community children.

The Central United Talmudical Academy, a private, all-boys religious school, played a prominent role in a New York Times investigation last month that found schools for Hasidic boys across the state received hundreds of millions of dollars in government funding while denying their students a basic secular education.

The Williamsburg school received about $10 million in government funding in the year before the pandemic, according to a Times analysis. Its leaders, who are affiliated with the Satmar group of Hasidic Judaism, also operate several other schools in the state.

There are more than 100 Hasidic boys’ schools in Brooklyn and the lower Hudson Valley, and they’ve received a total of more than $1 billion in taxpayer money over the past four years, the Times. They focus on religious education, with most offering little reading and math instruction in English and almost no history, science, or civics classes.

In general, many Hasidic boys’ schools score lower on state standardized tests than all other schools in the state, public or private.

In 2019, the Times reported, the Central United Talmudic Academy agreed to administer standardized state tests in reading and math to more than 1,000 students. Each of them failed.

Rebecca Davis O’Brien contributed report.