Federal Indictment of Satmar-Aaron School Officers in Fraud of At-Risk After-School Meal Program

A federal indictment was filed on August 10, 2017 in the Eastern District of New York against two officers in the Aaronite-Satmar Williamsburg school system: Elozor Porges and Joel Lowy. The indictment alleges that the officers submitted false reimbursement requests to the New York State Department of Health (NYSDOH) for a joint federal-state food program called Child and Adult Care Food Program (CACFP). CACFP reimburses after-school care centers for snacks and suppers it offers its children (up to age 18).

The program has its roots in the year 1994, when it was begun as a pilot program in certain high-drug and high-poverty areas. It was meant to draw “at-risk” youths away from crime-prone street activities and into educational and craft activities instead. The free snacks were meant both to spur the operation of such programs by reducing or eliminating their food cost and to lure youths into such programs.

The CACFP was incrementally expanded through the decades before plateauing in 2010 with the congressional Healthy Hunger-Free Kids Act of 2010. At that time the program offered suppers to a qualifying program anywhere in the Unites States so long as more than 50% of students in a sponsoring program’s “attendance area” were eligible for free or reduced-cost school lunch. Students attending such programs do not have to submit any paperwork to qualify.

Central United Talmudical Academy (CUTA), the official entity that operates Aaronite Satmar schools in Williamsburg, enrolled three of its school in the CACFP program: Wythe school, Sandford school, and Franklin school. For the two-years time specified in the indictment, Jan. 2014-Dec. 2015, CUTA was “reimbursed” by NYSDOH around three million dollars under the program.

Although not explicitly stated in the indictment, it seems that the CACFP child-care program run by CUTA was a mere extension of the school day. The government allows it under the following guideline:

A school that operates longer than the traditional school day may be eligible for At-Risk Afterschool Meal reimbursement, provided that it operates a school day that is at least one hour longer than the minimum number of school day hours required for the comparable grade levels by the local educational agency in which the school is located (At-Risk Afterschool Meals, USDA, 2016, p.13).

The way the program is administered is that the “child care center” or the “sponsor” must submit monthly claims for reimbursement for the cost of the meals it provides. For each monthly claim, submitted either by mail or electronically, the provider must state the number of days the program was in operation, the number of students in attendance, and the number of meals served.

CUTA filled out all the paperwork and was reimbursed at the standard rate ($2.98 per supper for the school year 2014-2015). The problem was that no suppers were actually served in any of the schools on any of the five weekdays it claimed (Sun-Thur). The custom in Haredi schools is to dismiss girls and pre-yeshiva students around five or six o’clock, which allows for their return home to eat supper with their families. (Teenage yeshiva students are offered supper at school so that they can continue their Talmudic studies afterwards before returning home around ten in the evening.)

The federal indictment contains four “counts”, one for each of the monthly reimbursement claims from January-May, 2014. The CUTA officers are being charged with committing “mail and wire fraud” since the fraudulent claims were trasnmitted by USPS mail and by wire, i.e. electronically over the Internet.


Analysis

In the announcement of the indictment on Aug 17, 2017 government officials made a moral claim for the prosecution:

  1. “Former CUTA Executive Director Porges and Assistant Director Lowy allegedly obtained $3 million from a federal program designed to fund meals for needy children by claiming to have served meals they did not serve, thus undermining a program designed to assist the most vulnerable members of our community,” stated Acting United States Attorney Rohde.  “We will continue to work closely with our law enforcement partners to root out fraudulent schemes that misuse public funds.”
  2. “The Child and Adult Care Food Program strives to provide for at-risk children, and as school officials, Porges and Lowy should have strived to do the same,” stated Assistant Director-in-Charge Sweeney.   “Instead, they allegedly falsified documents to gain approximately $3 million in reimbursement for meals that were never served. To defraud programs designed to help those in need is simply inexcusable, and we will work relentlessly with our law enforcement partners to thoroughly investigate these frauds.”
  3. “As charged, these defendants stole food from children in need by diverting millions of dollars in public funds intended to pay for their dinners,” stated DOI Commissioner Peters. “Public funds must be spent for public purposes and, when they are not, DOI will expose the fraud and arrest the wrongdoers. DOI thanks our dedicated law enforcement partners on this case: the United States Attorney’s Office for the Eastern District of New York, the Federal Bureau of Investigation, and the Office of the Inspector General for the United States Department of Agriculture.”
  4. “The Child and Adult Care Food Program (CACFP) was created to provide nutrition assistance to children and adults who are truly in need,” stated Special Agent-in-Charge Dinkins.  “Those involved in fraud and abuse of USDA feeding programs will be investigated by our office to the fullest extent.  In this joint investigation with the Federal Bureau of Investigation and the New York City Department of Investigation, we worked together to identify and hold accountable those who sought to profit from the CACFP through illegal schemes.  The USDA, Office of Inspector General will continue to dedicate investigative resources, working with our law enforcement and prosecutorial partners, to protect the integrity of these programs and bring to justice those who commit fraud.”

The theme in all the above statements is that the program was intended for children “in need” and families that are “vulnerable” and that CUTA undermined the program and stole from children who were truly in need. But this emphasis on children in need is puzzling since the allegation is merely that CUTA did not use the funds for the reimbursement of the meals it claimed to have served, not that the funds were not used to help children in need, which the Satmar kids in question indisputably are, both dejure and defacto.

What the government is omitting from the picture, either deliberately or by ignorance, is the way Haredi schools are operated in America in present times and the motivation for this “crime”:

Counties collect real estate taxes from all its residents but the revenue is allocated for the educational needs of ONLY such residents who elect to send their kids to secular public or charter schools. School boards believe that it is a violation of the First Amendment Establishment Clause, which is construed to require a separation of church and state.

The result is, paradoxically, a state discrimination against religious people who seek to foster and preserve their religious identity by enrolling their children in private religious schools. With private religious schools NOT being funded by tax dollars (to which religious parents contribute as well), parents of its pupils must pay a financially straining tuition while other parents get a free pass — a tuition that doesn’t cover the full cost of running the school. The practical upshot of this is that Hasidic schools in New York are perpetually strapped for cash and are impelled to seek relief through tax dollars in any way they can, even through sketchy means.

It is true that a sophisticated apparatus has emerged within the Hasidic educational sector to bilk government programs for all it can. What isn’t true is that the Hasidic children are not needy, or that it’s unfair for Hasidic schools to receive such educational funding. In terms of neediness Hasidic children are demographically one of the neediest in the nation. A high reproductive rate and an affinity for kolel study and aversion to a wide swath of lucrative professions within the occupational spectrum accounts in part for Hasidic poverty. But, with respect to education especially, the state’s refusal to forthrightly grant funding to Hasidic schools, creates an enormously burdensome financial strain on the Hasidic population, and the policy is ultimately impoverishing in itself.

Brooklyn spent a jaw-dropping $17,000 per year per pupil in its public school system. Every Hasidic child who is diverted to a private school is a municipal saving of $17,000 and a shift of that cost from the public to the parent.

Hasidic schools economize, to be sure. They save administratively; they save by eliminating “special-needs” programs that consume a disproportionate sum of money in public schools; they save by skimping on salaries, and so on. But the other way to save is by squeezing every ounce of juice they can from every government program they can get their hands on.

While the federal indictment is technically and legally correct, there is little to no moral impetus in it. The smug, self-righteous claptrap moralizing in the government’s announcement is repulsive. So is the government’s dissembling assertion that the funds are being embezzled by those who seek to “profit” from it (quote 4 above). Who profits from it? The schools are non-for-profit organizations, and not a single school officer has waxed wealthy from their school-derived remuneration.

Let’s be clear here: The indictment is not against the Porges and Lowy individuals. It is against the school system at large. And the prosecution’s effect, whether intended or not, is to defund and impoverish the Haredi school system even further.

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6 Responses to Federal Indictment of Satmar-Aaron School Officers in Fraud of At-Risk After-School Meal Program

  1. Rabbi Joseph Teitelbaum says:

    Too long an article to read.

    So i went straight to the analysis, since the news was already last week reported in all the new york outlets except that liberal shot rag the ny times.

    Let me recount it in short:

    1. We are the chosen nation and g-d says all wealth is ours.

    2. there is no issue of stealing from non jews. (only if you get caught but the Tsitzis take care of that part nobody dees any faces so fake media is not reliable that it is a jew indeed hiding there.

    3. Those meals are for us since we are the poor.

    4. these money is ours since we are the tax payer.

    5. The gentiles break the law more only they won’t arrest themselves.

    6. Trump will pardon us tomorrow no worries. His son in law Kushner is one of us anyways…

    How very smart this writer is:

  2. Rabitzen Sasha-Malia Hager says:

    Those kids, their parents use smartphones, not flip phones as the Rebbe only lets those who need it for Business and these moms do not need to do business, only use it for shopping all day and to read the fake media that writes lies against the rebbe – so it’s a Mitzvah to steal from them.

  3. Mo says:

    Is this troll city here in the comments section?

    A free for all, no supervision, or moderation?

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