The largest private Hasidic Jewish school in New York admitted to stealing millions of dollars from government programs. Operators of the Central United Talmudical Academy in Brooklyn admitted in court Monday to the fraudulent wrongdoings.
The all-boys school, which serves 2,000 youth in the area, admitted to illegally shifting funds from government programs. Instead, the funds were used on parties and miscellaneous expenses not approved by the respective programs.
To avoid prosecution, the academy will pay $5 million in fines as well as another $3 million in restitution they’ve already paid.
Feds Watching
Federal investigators caught wind of the fraud happening at Central United Talmudical Academy after investigating two school officials, Elozer Porges and Joel Lowy. The pair pled guilty to conspiracy to defraud the government in March 2018. The case was a chain reaction into a greater scheme at COTA.
“Today’s admission makes clear there was a pervasive culture of fraud and greed in place at CUTA,” said Michael J. Driscoll, the assistant director of the FBI’s New York office. “We expect schools to be places where students are taught how to do things properly. The leaders of CUTA went out of their way to do the opposite, creating multiple systems of fraud in order to cheat the government.”
School officials admitted to taking funds acquired for school lunches, childcare, and new technology and using it for inappropriate expenses like adult parties. They also set up no-show jobs for employees and paid some staff members in cash and coupon so they could qualify for government assistance, according to a deferred prosecution agreement filed in U.S. District Court in Brooklyn.
Big Money, Little Education
Despite taking large amounts of money from the federal government since before the pandemic, investigators say the students at Central United Talmudical Academy have been receiving a subpar education.
A New York Time investigation revealed the school received $10 million dollars in government funding in 2019. However, the academy gave 1000 students standardized tests that year and every student failed.
According to that same investigation, Hasidic boys’ schools score lower on standardized tests than any other school in New York. Currently, there are more than 100 Hasidic boy’s schools in Brooklyn and the surrounding areas that have acquired more than 1 billion dollars in taxpayer money over the past four years.
