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Jewish school in New York to pay $8 mn to avoid fraud prosecution

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A yeshiva school bus in September 2022 in Brooklyn, New York./AFP
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Oct 25, 2022 - 04:01 AM

NEW YORK — An Orthodox Jewish school in New York state will pay $8 million after admitting to financial fraud and embezzlement of public funds, according to court documents released Monday.

The Central United Talmudical Academy (CUTA), which operates New York state’s largest Hasidic educational establishment in the Brooklyn neighborhood of Williamsburg, admitted to embezzling some $3 million from the federal government that was intended for the daily meals of some 2,000 schoolboys.

To avoid criminal charges and to close a federal investigation launched in 2018, CUTA has agreed to pay a fine of $5 million in addition to the $3 million it has already returned, according to a statement by the New York federal prosecutor’s office.

“The misconduct at CUTA was systemic and wide ranging, including stealing over $3 million allocated for schoolchildren in need of meals,” said US Attorney Breon Peace in the statement.

The prosecutor said the agreement with the religious school will make it possible to provide “a path forward to repay and repair the damage done to the community, while also allowing CUTA to continue to provide education for children in the community.”

The FBI, which led the investigation, said the school’s “admission makes clear there was a pervasive culture of fraud and greed in place at CUTA.”

“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,” said FBI assistant director Michael Driscoll.

Two former school leaders have already pleaded guilty in 2018 to complicity in financial fraud, one of them receiving a two-year prison sentence, the other a suspended sentence and a hefty fine.

According to The New York Times, Brooklyn and the lower Hudson Valley have around 100 Hasidic religious schools, which have received more than $1 billion in taxpayer money in the past four years.

“They focus on providing religious instruction, with most offering little instruction in English, reading and math and almost no classes in history, science or civics,” the newspaper said.

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