Government May End Action Against Nyc Jewish Schools Charged with Falsifying Applications for Funds
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Government May End Action Against Nyc Jewish Schools Charged with Falsifying Applications for Funds

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The U.S. Government and eight Jewish schools in New York it has accused of using false information to obtain federal finances for education have reached a “tentative agreement” that may close the actions against them.

The agreement to settle the case which has been underway for 18 months has been worked out between counsel for the schools and the Inspector General of the Department of Health and Human Services, Richard B. Lowe III. The agreement is now under review in the U.S. Department of Education which will decide the issues.

Developments were made known to the Jewish Telegraphic Agency by Richard Hastings, chief of the Division of Certification and Program Review in the Department of Education’s Office of Student Financial Assistance.

Hastings said that after aid to the schools was terminated last Jan. 13, the administrative law judge, Manuel Taxel of Brooklyn, appointed by the Education Department to conduct proceedings was asked by the Department to delay setting a date for them while the inspector general was attempting to negotiate a settlement with the schools.

Hastings explained that under the administrative proceedings, as contrasted with judicial proceedings, final determination is made by the Education Department. That Department’s ruling, he said, may be subsequently appealed by the defendants in the courts.


Hastings said that no official public announcement has been made about the case but that education journals had reported it last winter after aid was first suspended. Thomas A. Butts, deputy assistant secretary for financial assistance, suspended the funding for 30 days on Jan. 30. This was followed on Feb. 27 with a letter to the schools stating termination based on “the gravity of information” obtained by the government.

The current issue of “Federal Times,” reported the case under headlines “Millions in U. S. Aid Cut Off for Eight Jewish Schools in N. Y. ” and indicated the Carter Administration took into account the political campaigns in New York in its handling of the charges.

The newspaper’s report, by Lewis M. Helm who was assistant secretary for public affairs of the Department of Health, Education and Welfare in the Ford Administration, declared “no announcement is planned about pending criminal prosecution until after the presidential election Nov. 4” and that “this decision was reached by (HEW) Secretary Patricia Roberts Harris.”


When interviewed by JTA, Hastings rejected the “political motivation” reported in the Federal Times. However, the issue was not determined before Nov. 4 and the possibility remains of criminal proceedings being undertaken by the Department of Justice in the future against the schools.

The investigation of the schools started under HEW and it continued the probe although the Education Department was established in the meantime. Hastings said the amount of money involved in the total U.S. payments to me schools for the four U.S. fiscal years 1977 through 1980 inclusive was “in excess” of $8 million.

Under the government’s Basic Educational Opportunity Grants Program, college students under certain-financial circumstances are entitled to U.S. payments for up to half their college costs. Payments run from $200 to $1,800 a year. The Inspector General’s files contain copies of falsified documents from hundreds of students in all parts of the country who applied for assistance.

In this particular case, according to federal sources, the eight schools allegedly processed applications from non-college students with False names and false social security numbers. The schools then allegedly billed the government for the amounts approved by HEW on the basis of the student applications.

Hastings identified the schools that received termination letters as follows: Be’er Shmuel Talmudical Academy, United Talmudical Academy, Rabbinical College of Sanz, Yeshiva F Shearim-Mishore Halochoth Godoloth Institute, Bais Yaakov Seminary of Brooklyn, and Rabbinical College of Tosh, all in Brooklyn; Ohr Yisrael Rabbinical College in Forest Hills, and Rabbinical Seminary of New Square in New Square, N.Y.

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