Reading Time: 3 minutes

A month after the New York Timesbombshell report about how Hasidic schools in the city were depriving students of a quality education, the largest school has now admitted to fraud, stealing millions of dollars from the state government that was meant to assist kids.

The Central United Talmudical Academy (CUTA), which serves over 5,000 students over multiple campuses, was already struggling academically. In 2019, they gave standardized math and reading exams to over 1,000 students, and every single one of them failed. As discussed earlier, that lack of basic education can be blamed on a number of reasons, including the prioritizing of faith-based (mis)information over anything secular.

But yesterday, the U.S. Attorney’s Office in the Eastern District of New York announced a different reason kids were left behind at this Hasidic school: straight-up fraud.

DOI Commissioner Jocelyn E. Strauber said, “As detailed in the prosecution agreement, CUTA engaged in an extensive scheme to steal millions of dollars in public funds, diverting money intended to feed schoolchildren and facilitating tax and benefit fraud by its employees.  DOI and its law enforcement partners in the United States Attorney’s Office for the Eastern District of New York, the FBI and the USDA are committed to the prevention of fraud that undermines public assistance programs.  With this resolution, which includes a $5 million penalty, CUTA has acknowledged and will be held accountable for its misconduct.

The details of the fraud are incredible.

Between 2013 and 2015, school officials “submitted false and misleading documents” to the state to get reimbursed for student meals. They said students were participating in after-school programs that kept them there until the evening, so the school was providing them with supper. The reimbursements were meant to cover the food as well as the cost of supervision by staff. Despite the school saying that over 1,000,000 meals were served, virtually none of those claims were real. The school, however, received $3,256,338.68 for those lies.

It’s not just lying about the meals. They weren’t accurately counting the breakfasts and lunches they did serve, filed for reimbursement based on the number of kids in school that day and not how many actually ate the food, and said they needed reimbursements for days when school wasn’t even in session.

So why did they do this? What was in it for the school?

The U.S. Attorney’s Office said that some of the money was given to staffers under the table, in a way that didn’t have to be reported for tax purposes. They gave out food vouchers worth $100 at a time, which at one point, provided about 17% of employees’ compensation. They wrote paychecks in the name of a staffer’s friends and relatives who were not employed by the school as a way to avoid taxes. They sometimes covered their employees’ credit card bills and other personal expenses. They “abused parsonage designations” by claiming staffers were performing religious duties even when they weren’t. They also purchased life insurance policies for religious teachers, handing them over even after they left the school, giving them “an unreported form of additional compensation.”

When those employees filed for other government benefits, like Medicaid or public housing or childcare vouchers, they were only reporting their stated income, not the actual income, which contributed to the fraudulent scheme.

In additional to all that, the school was said to defraud a program meant to provide internet access to students and offer unlicensed childcare services to teachers, which violated the law.

As a result of this investigation, the school said it would pay back the $3.2 million it stole and pay an additional $5 million in penalties. One school official, Elozer Porges, was sentenced to two years in prison while another, Joel Lowy, was given five years’ probation. The school has also agreed to several structural changes, including replacing its entire management team, creating new financial and procedural controls, and opening itself up for periodic audits by the state.

While the fraud crimes at this school are unique, it’s part of a larger problem among Hasidic schools where education simply isn’t taken seriously. Boys are trained to become rabbis, even though few will pursue that path, and don’t receive adequate training in secular subjects. (Girls received a slightly more well-rounded education, but it’s hardly any better.) Many of these students go on to say they just weren’t given the tools to be successful, especially if they chose to leave their Orthodox Jewish bubbles.

If the thinking is that religious schools are more ethical and hold themselves to higher standards than public schools, this story is yet another piece of evidence proving that faith-based schools can’t be trusted to police themselves. They’re not interested in teaching students to think critically; they’re using education as cover to indoctrinate kids and, at least in this case, enrich themselves.

Avatar photo

Hemant Mehta is the founder of FriendlyAtheist.com, a YouTube creator, podcast co-host, and author of multiple books about atheism. He can be reached at @HemantMehta.