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| Hasidic School to Pay $8 Million After Admitting to Widespread Fraud | |
| (about 1 hour later) | |
| The largest private Hasidic Jewish school in New York State stole millions of dollars from a variety of government programs in a yearslong fraud, the school admitted in federal court documents filed on Monday. | The largest private Hasidic Jewish school in New York State stole millions of dollars from a variety of government programs in a yearslong fraud, the school admitted in federal court documents filed on Monday. |
| The operators of the school, the Central United Talmudical Academy, which serves more than 2,000 boys in Williamsburg, Brooklyn, acknowledged that they illegally diverted money from government programs for school lunches, technology and child care. They also admitted to setting up no-show jobs for some employees while paying others in cash and coupons so the employees could qualify for welfare, according to a deferred prosecution agreement filed in Federal District Court in Brooklyn. | The operators of the school, the Central United Talmudical Academy, which serves more than 2,000 boys in Williamsburg, Brooklyn, acknowledged that they illegally diverted money from government programs for school lunches, technology and child care. They also admitted to setting up no-show jobs for some employees while paying others in cash and coupons so the employees could qualify for welfare, according to a deferred prosecution agreement filed in Federal District Court in Brooklyn. |
| In all, the school agreed to pay $5 million in fines in addition to the more than $3 million it had already paid in restitution as part of the deal to avoid prosecution. | In all, the school agreed to pay $5 million in fines in addition to the more than $3 million it had already paid in restitution as part of the deal to avoid prosecution. |
| “Today’s admission makes clear there was a pervasive culture of fraud and greed in place at C.U.T.A.,” said Michael J. Driscoll, the assistant director in charge of the F.B.I.’s New York office, referring to the school by its initials in a statement on Monday. “We expect schools to be places where students are taught how to do things properly. The leaders of C.U.T.A. went out of their way to do the opposite, creating multiple systems of fraud in order to cheat the government.” | “Today’s admission makes clear there was a pervasive culture of fraud and greed in place at C.U.T.A.,” said Michael J. Driscoll, the assistant director in charge of the F.B.I.’s New York office, referring to the school by its initials in a statement on Monday. “We expect schools to be places where students are taught how to do things properly. The leaders of C.U.T.A. went out of their way to do the opposite, creating multiple systems of fraud in order to cheat the government.” |
| As part of the fraud, school officials took money intended to feed children and instead used it to subsidize parties for adults, the federal authorities said Monday. | As part of the fraud, school officials took money intended to feed children and instead used it to subsidize parties for adults, the federal authorities said Monday. |
| A lawyer representing the school, Marc Mukasey, declined to comment. Other representatives of the school did not immediately respond to phone and email messages seeking comment. | A lawyer representing the school, Marc Mukasey, declined to comment. Other representatives of the school did not immediately respond to phone and email messages seeking comment. |
| The federal investigation into the school’s use of government funding stemmed from a more narrow criminal case in which two former school leaders, Elozer Porges and Joel Lowy, pleaded guilty in March 2018 for their roles in the conspiracy to defraud the government. | The federal investigation into the school’s use of government funding stemmed from a more narrow criminal case in which two former school leaders, Elozer Porges and Joel Lowy, pleaded guilty in March 2018 for their roles in the conspiracy to defraud the government. |
| Since that case, the school has replaced its executive management team and developed a new set of controls, among other changes, the federal authorities said. As part of the deal, the school will also be subject to the supervision of an independent monitor for the next three years. | Since that case, the school has replaced its executive management team and developed a new set of controls, among other changes, the federal authorities said. As part of the deal, the school will also be subject to the supervision of an independent monitor for the next three years. |
| “The misconduct at C.U.T.A. was systemic and wide-ranging, including stealing over $3 million allocated for schoolchildren in need of meals,” said Breon Peace, the U.S. attorney for the Eastern District of New York, in a statement on Monday. “Today’s resolution accounts for C.U.T.A.’s involvement in those crimes and provides a path forward to repay and repair the damage done to the community, while also allowing C.U.T.A. to continue to provide education for children in the community.” | “The misconduct at C.U.T.A. was systemic and wide-ranging, including stealing over $3 million allocated for schoolchildren in need of meals,” said Breon Peace, the U.S. attorney for the Eastern District of New York, in a statement on Monday. “Today’s resolution accounts for C.U.T.A.’s involvement in those crimes and provides a path forward to repay and repair the damage done to the community, while also allowing C.U.T.A. to continue to provide education for children in the community.” |
| The Central United Talmudical Academy, an all-boys private religious school, factored prominently in a New York Times investigation last month that found that Hasidic boys’ schools across the state had received hundreds of millions of dollars in government funding while denying their students a basic secular education. | The Central United Talmudical Academy, an all-boys private religious school, factored prominently in a New York Times investigation last month that found that Hasidic boys’ schools across the state had 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. | 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 have received a total of more than $1 billion in taxpayer money over the past four years, The Times found. They focus on providing religious instruction, with most offering little instruction in English reading and math and almost no classes in history, science or civics. | There are more than 100 Hasidic boys’ schools in Brooklyn and the lower Hudson Valley, and they have received a total of more than $1 billion in taxpayer money over the past four years, The Times found. They focus on providing religious instruction, with most offering little instruction in English reading and math and almost no classes in history, science or civics. |
| In general, many Hasidic boys’ schools score lower on state standardized tests than any other schools in the state, public or private. | In general, many Hasidic boys’ schools score lower on state standardized tests than any other schools in the state, public or private. |
| In 2019, The Times reported, the Central United Talmudical Academy agreed to give state standardized tests in reading and math to more than 1,000 students. Every one of them failed. | In 2019, The Times reported, the Central United Talmudical Academy agreed to give state standardized tests in reading and math to more than 1,000 students. Every one of them failed. |
| Rebecca Davis O’Brien contributed reporting. | Rebecca Davis O’Brien contributed reporting. |