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Hasidic School to Pay $8 Million After Admitting to Widespread Fraud - The New York Times

  

Category:  News & Politics

Via:  jbb  •  one month ago  •  35 comments

By:   Brian M. Rosenthal and Eliza Shapiro (nytimes)

Hasidic School to Pay $8 Million After Admitting to Widespread Fraud - The New York Times
The Central United Talmudical Academy, which operates the largest all-boys yeshiva in New York State, acknowledged illegally diverting money from federal food aid and other programs.

S E E D E D   C O N T E N T



The Central United Talmudical Academy, which operates the largest all-boys yeshiva in New York State, acknowledged illegally diverting money from federal food aid and other programs.

The operators of the Central United Talmudical Academy in Brooklyn admitted in federal court to diverting government money in a wide-ranging fraud.Credit...Jonah Markowitz for The New York Times

By Brian M. Rosenthal and Eliza Shapiro

Oct. 24, 2022Updated 6:32 p.m. ET

For years, the largest private Hasidic Jewish school in New York State illegally diverted millions of dollars from a variety of government programs, paid teachers off the books and requested reimbursements for meals for students that it never actually provided, the yeshiva's operators admitted in federal court on Monday.

As part of the widespread fraud, school officials took money intended to feed children and used it to subsidize parties for adults, federal prosecutors said.

In order to avoid facing criminal charges, the school, the Central United Talmudical Academy in Williamsburg, Brooklyn, agreed to pay fines and restitution totaling more than $8 million, according to a deferred prosecution agreement filed Monday in Federal District Court in Brooklyn.

"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, assistant director in charge of the F.B.I.'s New York office, referring to the school by its initials in a statement. "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."

In court on Monday, a lawyer representing the yeshiva, Marc Mukasey, said school leaders would work collaboratively with the government to fulfill its obligations under the agreement, which has been in the works since 2019. After the hearing, Mr. Mukasey declined to comment further. School leaders did not respond to phone and email messages seeking comment.

The filing came six weeks after a New York Times investigation revealed that about 100 all-boys Hasidic schools across the state had received more than $1 billion in taxpayer funding in recent years while most were denying their students a basic secular education. The Central United Talmudical Academy figured prominently in that article.

Since then, Hasidic schools have come under intensifying government pressure on multiple fronts, with officials scrutinizing what the schools teach and how they manage their finances.

Timeline: New York's Oversight of Hasidic Schools


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State law requires all private schools to provide an education comparable to what is in public schools. In 2015, New York City's education department said it would investigate complaints about the quality of secular education in schools in the Hasidic Jewish community. Here's a timeline of the investigation:

July 2015: Graduates of Hasidic religious schools, known as yeshivas, wrote a complaint about the poor secular education they received. Then-Mayor Bill de Blasio's administration opened an investigation into the schools, but it soon stalled, plagued by delays and a lack of cooperation from the yeshivas.

November 2018: The state released updated rules outlining what nonpublic schools like yeshivas must teach and for how long - with consequences for schools that did not comply. Hasidic leaders sued, and the rules were thrown out in court in 2019.

December 2019: The city Department of Investigation found the de Blasio administration delayed a report on the schools. A few days later, the city finally released findings: only two of 28 yeshivas that officials visited were offering a basic secular education. The investigation has not concluded, and the city has done little to follow up.

Sept. 11, 2022: A New York Times investigation found scores of schools are systematically denying children a basic education, a violation of state law that has trapped generations of students in a cycle of joblessness and destitution. Even so, The Times found, these institutions have collected more than $1 billion from city, state and federal sources in the past four years alone.

Sept. 13, 2022: The State Board of Regents voted unanimously to approve rules that would force Hasidic yeshivas and other private schools to prove they are offering basic secular instruction. The vote came after four years of tumultuous debate about how the government should regulate the schools.

Oct. 6, 2022: The New York education commissioner ruled that a large boys' yeshiva in Williamsburg, Brooklyn, is violating state law by failing to provide a basic secular education. This is the first time the state has taken action against a Hasidic boys' school. New York City had earlier recommended the school be found in compliance with the law.

Oct. 24, 2022: The operators of the largest private Hasidic school in New York State admitted to diverting millions of dollars from government programs in a widespread fraud scheme, paying teachers off the books and receiving reimbursement for student meals that they never actually provided.

In September, the State Board of Regents approved a set of rules requiring all private schools, including yeshivas, to prove they are teaching nonreligious subjects like English and math or face a loss of funding.

The state education commissioner ruled this month that one Brooklyn boy's yeshiva that had been the subject of a lawsuit was not complying with the state law requiring all private schools to provide a basic secular education. That school will have to work with the New York City Education Department to improve.

As part of the agreement filed in court on Monday, the Central United Talmudical Academy will be subject to an independent monitor for the next three years, after which prosecutors will dismiss the charges. The school will be able to submit a list of potential monitors for the government to approve.

The school has more than 2,000 male students enrolled at one location and 2,500 female students at separate buildings nearby. It is the flagship organization of a powerful faction of the Satmar group of Hasidic Judaism run by Grand Rabbi Aaron Teitelbaum. The faction operates several other schools in Brooklyn and the lower Hudson Valley.

The Williamsburg school received about $10 million in government funding in the year before the pandemic, according to a Times analysis of city, state and federal funding records.

During a hearing on Monday, U.S. District Judge Nicholas G. Garaufis said he was "deeply concerned" about the behavior the yeshiva admitted to engaging in. "It is my hope that this is a new beginning," he added.

Judge Garaufis implored two school representatives, Cheskel Berkowitz and Yoel Weisz, to follow through on the promises the school had made to eliminate any financial impropriety, "for the good of the community."

The federal investigation into the school, led by the U.S. attorney's office for the Eastern District of New York, stemmed from a criminal case against two of its former leaders, Elozer Porges and Joel Lowy. Both men pleaded guilty in March 2018 for their roles in a conspiracy to defraud the government through school nutrition programs.

During that case, the investigators found evidence of other fraud and broadened the scope of their inquiry, the federal authorities said.

The documents filed on Monday revealed that the school was at the center of a varied and wide-ranging fraud scheme.

For years, the documents showed, the school paid many of its teachers and other employees in part with cash, coupons and life insurance policies, making it seem as if the employees were earning less than they really were and allowing them to pay lower taxes and qualify for welfare.

From 2010 to 2015, the school paid employees with at least $12 million in coupons â 17 percent of its total employee compensation â which the workers could use as cash in Hasidic grocery stores and other shops, the investigators found.

The school also set up no-show jobs for friends of employees and other community members, the documents said.

The yeshiva also benefited from its fraudulent payment practices because many employees and other community members used their welfare status to receive New York City vouchers for child care â and then used them to pay the school, according to the documents. The Times reported last month that a city voucher program sent nearly a third of its total funding to Hasidic neighborhoods last year.

The federal investigation found that the school defrauded government programs meant to provide meals to low-income children, receiving more than $3.2 million from 2014 to 2016 in reimbursement for what the authorities said was an "almost entirely fictitious" meal program.

The fraud included the fabrication of records and dozens of sworn misrepresentations to government agencies, the authorities noted.

In some cases, the court documents said, yeshiva officials claimed that they provided meals to children on days when the school was not in session.

In recent years, as the school has negotiated with the prosecutors, it has replaced its executive management team and developed a new set of controls, among other changes, the authorities said.

"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," said Breon Peace, the U.S. attorney for the Eastern District of New York, in a statement.

The Times investigation found that the Central United Talmudical Academy, like other Hasidic schools, focused almost exclusively on providing religious education, with little instruction in English, reading and math and almost no classes in history, science or civics.

The Times also reported that Hasidic boys' schools tend to score much lower on state standardized exams than other schools in New York.

In 2019, the Central United Talmudical Academy agreed to give state standardized tests in reading and math to more than 1,000 students, The Times found. Every one of them failed.

Rebecca Davis O'Brien contributed 


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JBB
Professor Principal
1  seeder  JBB    one month ago

Yeshivas take state money but fail state standards.

 
 
 
Drinker of the Wry
Freshman Principal
1.1  Drinker of the Wry  replied to  JBB @1    one month ago

Jews, eh?

 
 
 
Perrie Halpern R.A.
Professor Principal
1.1.1  Perrie Halpern R.A.  replied to  Drinker of the Wry @1.1    one month ago

Clarifcation, please.

 
 
 
Revillug
Freshman Guide
1.1.2  Revillug  replied to  Drinker of the Wry @1.1    one month ago

Must you?

 
 
 
Drinker of the Wry
Freshman Principal
1.1.3  Drinker of the Wry  replied to  Perrie Halpern R.A. @1.1.1    one month ago
Clarifcation, please

Ok, from this article, it looks like clear fraud by Central United Talmudical Academy.  

That said, most NYC schools don't pass muster even though they spend more per student than any other district.

I don't remember seeing other seeds critical of NYC school failures, just this one.

 
 
 
Drinker of the Wry
Freshman Principal
1.1.4  Drinker of the Wry  replied to  Revillug @1.1.2    one month ago

Must I what?

 
 
 
Revillug
Freshman Guide
1.1.5  Revillug  replied to  Drinker of the Wry @1.1.3    one month ago

Ok. I get where you are coming from now.

Being from New York, I almost posted this over on Reddit in a New York subreddit.

To New Yorkers, like myself, this is more of a story of New York children being victimized by scammers than a dog whistle about Jews.

 
 
 
Perrie Halpern R.A.
Professor Principal
1.1.6  Perrie Halpern R.A.  replied to  Drinker of the Wry @1.1.3    one month ago

Fair enough.

That being said (and an ex-NYC teacher), grades are down across America since the pandemic. 

Check out this chart:

It is a very mixed bag of performance, by grade and subject matter. 

But performance should be better.

 
 
 
Revillug
Freshman Guide
1.1.7  Revillug  replied to  Perrie Halpern R.A. @1.1.6    one month ago
ex-NYC teacher

It strikes me that NYC has some unique challenges.

For one thing, more than a quarter of students in NYC attend private or charter schools.

I went to catholic school and then to one of the science public high schools.

If I had to go to a regular public school, I think I would have hung myself in in my cell.

 
 
 
Drinker of the Wry
Freshman Principal
1.1.8  Drinker of the Wry  replied to  Revillug @1.1.7    one month ago
It strikes me that NYC has some unique challenges.

Yes and NYC, in this Blue city, are the most segregated schools by race and socio-economic status in the nation.

 
 
 
Revillug
Freshman Guide
1.1.9  Revillug  replied to  Drinker of the Wry @1.1.8    one month ago
NYC, in this Blue city, are the most segregated schools by race and socio-economic status in the nation.

I'm sure if we vote in some Republicans to run NYC they will get right on top of fixing that.

Republicans are still the party of Lincoln, after all.

You will be hard pressed to find a county in America with such a gap between the rich and the poor within a very small distance from each other.

Manhattan has 1,694,251 people on 22.8 square land miles.

It is the most densely populated county in the USA. 

The northern part of Manhattan shares a lot of demographic traits, ethnically and financially, with the South Bronx. The Upper East Side and Wall Street areas of Manhattan are amongst the wealthiest neighborhoods in the nation.

The affluent in NYC don't send their children to public schools. Working class that can afford to send their children to catholic or other religious schools.

NYC public schools can be brutal environments. 

I would have hung myself in my cell. 

 
 
 
Tessylo
Professor Principal
1.1.10  Tessylo  replied to  Drinker of the Wry @1.1.8    one month ago
"Yes and NYC, in this Blue city, are the most segregated schools by race and socio-economic status in the nation."

Must you?

 
 
 
Drinker of the Wry
Freshman Principal
1.1.11  Drinker of the Wry  replied to  Tessylo @1.1.10    one month ago

Yes, for if only for you.

 
 
 
Drinker of the Wry
Freshman Principal
1.1.12  Drinker of the Wry  replied to  Perrie Halpern R.A. @1.1.6    one month ago
grades are down across America since the pandemic

Yes, my wife teaches in Fairfax County VA and we frequently discuss the challenges.

 
 
 
Perrie Halpern R.A.
Professor Principal
1.1.13  Perrie Halpern R.A.  replied to  Drinker of the Wry @1.1.8    one month ago
Yes and NYC, in this Blue city, are the most segregated schools by race and socio-economic status in the nation.

That is freewill at work. NYC has a program called "School Choice", where parents can send their kids to any public school.

.

If you choose to go to a private school either religious or non religious, that is also a choice.

And being a blue city has nothing to do with self-inflicted segregation. btw, this article had nada to do with politics.

 
 
 
Revillug
Freshman Guide
2  Revillug    one month ago

Every child in this country is entitled to an education that gives them the tools to choose for themselves as an adult what they want to do with their life and where they want to live it.

This issue in New York City with regard to some (many?) Yeshivas has been known for years.

FWIW, there is a school called Yeshiva University near where I live and I believe non-Jews are among the students who go there. From what I gather they offer a decent master's program in social services.

 
 
 
Revillug
Freshman Guide
2.1  Revillug  replied to  Revillug @2    one month ago
From what I gather they offer a decent master's program in social services.

I mean, those are the obviously non-Jewish students I have encountered. The school offers many other programs of study.

 
 
 
Ender
Professor Principal
3  Ender    one month ago

I thought Hasidic Jews had their own community, kinda like the Amish and the Mormons.

 
 
 
Gsquared
Senior Expert
3.1  Gsquared  replied to  Ender @3    one month ago

There are several different Hasidic Jewish groups, not just one "community".

 
 
 
Ender
Professor Principal
3.1.1  Ender  replied to  Gsquared @3.1    one month ago

I mean more like their own town and own rules, like the Amish. They also have their own system of justice.

 
 
 
Perrie Halpern R.A.
Professor Principal
3.1.2  Perrie Halpern R.A.  replied to  Ender @3.1.1    one month ago

That is only some of them. Other groups like the Chabad are very involved in the community at large.

 
 
 
Gsquared
Senior Expert
3.1.3  Gsquared  replied to  Ender @3.1.1    one month ago

I think some might, but I believe the largest Hasidic community in the U.S. is in Brooklyn in New York City.

 
 
 
devangelical
Professor Principal
4  devangelical    one month ago

the majority of religious based schools are a scam on the taxpayers...

 
 
 
Perrie Halpern R.A.
Professor Principal
4.1  Perrie Halpern R.A.  replied to  devangelical @4    one month ago

There we agree.

 
 
 
devangelical
Professor Principal
4.1.1  devangelical  replied to  Perrie Halpern R.A. @4.1    one month ago

taxpayer money going to organized religion rubs my concept of the 1st amendment the wrong way.

 
 
 
Perrie Halpern R.A.
Professor Principal
4.1.2  Perrie Halpern R.A.  replied to  devangelical @4.1.1    one month ago

I have to agree.

 
 
 
Drinker of the Wry
Freshman Principal
4.2  Drinker of the Wry  replied to  devangelical @4    one month ago

Exactly, unlike the NYC Public School system.

 
 
 
Revillug
Freshman Guide
4.3  Revillug  replied to  devangelical @4    one month ago
the majority of religious based schools are a scam on the taxpayers...

I have to push back on this a little bit.

I went to a Catholic primary school and from there I went to one of the "Specialized High Schools" in the public school system. The education I got in the Catholic primary school was good enough for me to place into honors classes in math and science in the specialized high school I attended. I wasn't the only one from my Catholic school to get accepted into one of the specialized high schools. Some turned them down because they had better options available to them (other scholarships).

Here in New York we have known for years that there is a serious problem with some of the Yeshivas. They are simply not bothering to teach secular subjects. There is a cult phenomenon at play. People who have managed to escape the trap go on and produce popular mini-series about it for Netflix.

 

 
 
 
devangelical
Professor Principal
4.3.1  devangelical  replied to  Revillug @4.3    one month ago

I fondly recall a catholic high school for girls on the fringe of my cruising turf back in the early 70's. it was across the street from a drive in restaurant popular with car crowds. I received an advanced education concerning science (biology) and math (economics and statistical probability) there. 

 
 
 
Tessylo
Professor Principal
4.3.2  Tessylo  replied to  devangelical @4.3.1    one month ago

jrSmiley_86_smiley_image.gif

 
 
 
Revillug
Freshman Guide
4.3.4  Revillug  replied to  devangelical @4.3.1    one month ago
I received an advanced education concerning science (biology) and math (economics and statistical probability) there. 

In the restaurant?

And to think with humble beginnings like those you one day wound up on Newstalkers with the rest of us.

 
 
 
Buzz of the Orient
Professor Expert
5  Buzz of the Orient    one month ago

In the movie The DaVinci Code, Jean Reno describes the glass pyramid in front of the Louvre as being "a scar on the face of Paris".   In my opinion, the Hasidic Jews are a scar on the face of Judaism.  What they did is a disgrace that has cast its shadow on the whole Jewish community.  I think the authorities should throw the book at them, not coddle them in the way the article describes.  

 
 
 
Gsquared
Senior Expert
5.1  Gsquared  replied to  Buzz of the Orient @5    one month ago

The Jewish culture is about 4,000 years old, if not older.  The Hasidic movement began only about 250 years ago.  I think of it as a cult.

 
 
 
devangelical
Professor Principal
6  devangelical    one month ago

personally, there's a huge points reduction in my mind on any religions that dictate fashion and/or appearance.

 
 
 
Drinker of the Wry
Freshman Principal
7  Drinker of the Wry    one month ago

[deleted]

 
 

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