BY MAURA MONAGHAN
The FBI arrested seven people on Wednesday, including six Ramapo residents, for allegedly stealing $14 million from a federally subsidized program meant to provide technology to underprivileged students in local yeshivas.
Prosecutors say the seven arrested – Peretz and Susan Klein of Spring Valley, Ben Klein of Monsey, Simon Goldbrener of Monsey, Moshe Schwartz of Monroe, Sholem Steinberg of Monsey and Aron Melber of Monsey – claimed they were serving as independent consultants to help provide telecommunication resources to the private Rockland County schools. They are accused of fraudulently obtaining millions of dollars in federal E-rate program funds, and have been charged with counts of conspiracy to commit wire fraud.
The arrests come after a series of FBI raids on Ramapo yeshivas and tech businesses in 2016. Those raids yielded no arrests, but involved a total of 22 search warrants demanding that the schools and businesses account for the equipment allegedly bought with federal funds.
One of the businesses targeted in 2016 was Hashomer Alarm Systems, owned by defendant Peretz Klein. At the time, it was known that Klein’s company acquired millions of dollars in E-rate grants to install infrastructure at private schools in Rockland County and Brooklyn.
Concerns about the Orthodox community’s use of E-rate funds were first raised in 2013 by Manhattan-based newspaper The Jewish Week. One report found that while only 4 percent of the state’s kindergarten through 12th-grade students attend private Jewish schools, 22 percent of New York’s E-rate funding went to Jewish schools and libraries in 2011 – a percentage worth more than $30 million. The Jewish Week noted that many Orthodox schools do not allow student access to the Internet, further raising the question of how the funds were being used.
The E-rate program is meant to provide students with communications technology by reimbursing schools up to 90 percent for equipment purchased from private vendors.
Today, federal investigators and officers from the Rockland County District Attorney’s Office say that the equipment was not provided, and that millions of dollars were fraudulently obtained from the program between 2010 and 2016. As vendors, those arrested are charged with billing the E-rate program for materials that were never given to the schools.
Six of the seven defendants pleaded not guilty at their arraignment on Wednesday, and were released on bail before federal court Judge Judith McCarthy. Aron Melber was not at the arraignment because of his daughter’s wedding.