Orthodox School Tied To Pre-K Funds Fraud

Millions said to be diverted to Queens girls’ yeshiva from leading special-ed service provider.

03/19/13
Associate Editor
Photo Galleria: 

A Queens-based special-education services provider illegally diverted millions of taxpayer dollars to a Far Rockaway Orthodox girls’ school and several other Jewish institutions, according to New York State auditors.

Bnos Bais Yaakov, a girls’ school with 812 students in pre-K through 12th grade, received nearly $2 million from Island Child Development Center, which was one of the city’s largest recipients of funding for services to preschool children with disabilities before it abruptly ceased operations in September.

Because Island Child closed before auditors could complete their investigation, State Comptroller Thomas DiNapoli’s office has referred the case to the State Education Department and Queens District Attorney.

However, according to a memo the office submitted to the education department and shared with The Jewish Week (the story was first reported in The New York Times), a review of just 1,549 out of 13,000 checks subpoenaed from Island Child’s bank, found approximately $5.8 million worth of payments that “appeared fraudulent as they were unrelated to any [State Education Department] programs for which Island Child was funded and appear to be noncompliant with SED’s [Reimbursable Cost Manual].”

In addition to the money paid to Bnos Bais Yaakov, whose owner and dean, Rabbi Shmuel Hiller, was also assistant executive director of Island Child, “suspect payments” include:

*Several Jewish summer camps, some of them owned by or with ties to Rabbi Hiller, collectively received $877,485 in unauthorized funds from Island Child.

*Rabbi Hiller received non-payroll checks for $332,032.

*The program also spent $344,000 in food, even though the government dollars are not allowed to be used for food; $73,000 of the food purchases came from Supersol, a kosher supermarket chain whose chief executive officer also served on Island Child’s and Bnos Bais Yaakov's boards.

*Auditors cited what they said were many other improper or fraudulent expenses, including $200,000 in construction, $12,000 to two jewelers, $235,000 to credit-card companies, $44,000 to “cash,” and nearly $200,000 to five fictitious workers.

*Island Child’s accountant “was derelict in certifying the entity’s financial statements,” ignoring “apparent conflicts of interest and unsupported, noncompliant and potentially fraudulent transactions.”

Rabbi Hiller did not return a voice mail message The Jewish Week left for him at Bnos Bais Yaakov.

In addition to the money it has received through Island Child, Bnos Bais Yaakov has requested almost $1.2 million from the E-rate program for 2013.

A recent Jewish Week investigation of E-rate, a federal program that reimburses schools for a portion of their telecommunications and technology expenses, found that fervently Orthodox Jewish schools in New York State disproportionately benefit from its funding, even though most do not allow their students access to the Internet.

Bnos Bais Yaakov’s 2013 E-rate application claims that at least 75 percent of its students are eligible for free or reduced lunches, qualifying it for a 90 percent discount on various tech purchases. E-rate funding decisions for 2013 have not yet been completed; so far, no funding has been approved yet for Bnos Bais Yaakov this year, although the school has received about $100,000 since the E-rate program launched in 1998.

julie.inthemix@gmail.com; @julie_wiener

Last Update:

03/22/2013 - 07:39

Comment Guidelines

The Jewish Week feels comments create a valuable conversation and wants to feature your thoughts on our website. To make everyone feel welcome, we won't publish comments that are profane, irrelevant, promotional or make personal attacks.

I read stories like this (and so sadly, there have been many) and I simply want to scream. These stories are a massive Chillul HaShem. For all of the naysayers and pessimists in the Frum community who constantly rail against "the goyim" and "anti-Semitism"--they should expend .05% of that same energy and look into themselves, their own communities, and the internal corruption that exist within both- and perhaps they'll realize they are the reason anti-Semitism still exists.

Too many bad apples. The only solution is strict separation of church and state, period. If you want your child to be educated in a non-public institution, cover the full freight - yourself!

I don't feel that I, or anyone for that matter, is in the position to pass judgment or even state their opinion on what did or didn't happen. What I do know is that in the 10 years I've been working alongside Rabbi Hiller on various communal projects, I have never seen anything but complete yashrus and honesty in everything he does and every decision he makes. I know firsthand that those in BBY that he works closely with feel the same way I do and we all have our own “Rabbi Hiller stories” that speak volumes about his integrity.

I know news like this is shocking and unsettling but we have to be careful not to rush to judge and come to our own conclusions because in reality, the only "facts" we have are from the New York Times. When the NYT runs a headline that reads "IDF slaughters innocent Palestinian children in Gaza" we all scream "liars, anti Semites"... And we're not mekabel…because we know it’s not true. But when they write about a prominent Rabbi and try to drag his name through the mud, unfortunately some of us are right there with them forwarding the link to all our contacts and helping to spread it as if it’s a proven fact. This is an ongoing investigation. I’ve been told that Rabbi Hiller has been advised by the community Rabbanim as well as his lawyer that he should not be issuing statements but they are all confident that in due time the truth will come out and he will be in the clear.

BBY is an amazing and strong school and it will be stable throughout this painful situation especially if we all show our support for Rabbi Hiller in this challenging time. In fact this is the most significant opportunity we each have to show Rabbi Hiller our gratitude for what he’s done for our girls. To publicly state our belief in his honesty and integrity is the right thing to do. To refrain from spreading loshon hara is the very least we can do.

Um, Mr. Liss - whatever happened to innocent until proven guilty? Reserve judgement and comments until someone's guilt is proven one way or another!

Dear Mr. Liss,

Since I don't know the veracity of the statements in this article I will not comment on them. And since you don't either you should not as well. You have condemned Rabbi Hiller because an article you read, from sources that are notably slanted as anti-chareidi at the very least, have portrayed him, through indisputable evidence, as committing fraud. An investigation which returns "suspect payments" is a far cry from undeniable proof. Asthe proverbial saying goes, "Don't throw out the baby with the bath water". If you take issue with the Agudah's policies and practices don't project on to individuals, especially when you are uniformed.

These funds, stolen from Black and Hispanic special needs children, will increase anti-Semitism in the affected community. As Jews we are all shamed.

It is high time that the Chareidi and Yeshivish Rabbis come out publically against their constituents' criminal enterprises. Nothing that Agudath Yisroel says has the same impact on the criminal element in their midst as action taken by Shuls and Agudath's rebbeim. Agudath Yisroel can run all the seminars and lectures they want condemning abuse, stealing, etc., but unless their "gedolim" pronounce a policy that any Jew convicted of a crime is denied an aliyah, honor or recognition in the Shul and community, nothing will ever change. I once heard Rabbi Yissocher Frand, one of Agudath Yisroel's bright lights, say that there is only one Mitzvah in the Torah, Chillul Hashem. All the other 612 Mitzvot are there just to protect against Chillul Hashem. Well, "Rabbi" Hiller, you just reminded us that 3500 years after the Exodus there are still Jews who wallow in the 49th level of tumah (impurity) and never seem to want to rise.

Add comment

The content of this field is kept private and will not be shown publicly.
By submitting this form, you accept the Mollom privacy policy.