The son of the founder of the chasidic village of New Square was among four men convicted this week of stealing more than $11 million from federal education, housing and social service benefits programs in a decade-long scam.
A federal jury in White Plains deliberated five days before reaching the verdict on three men from the Rockland County village and one man from Brooklyn.
Assistant U.S. Attorney Deborah Landis said their scheme included the creation of a phony yeshiva in Brooklyn, called Toldos Yakov Yosef, that was used to obtain federal grants designed for needy students.
During the two month trial, Landis had argued that the names of thousands of residents of New Square and Brooklyn were used to obtain Pell grants to enroll students in fake yeshiva and advanced rabbinic studies programs. In some cases students, Russian immigrants, were unaware their names were being used, she said.
Among the three men from New Square is Benjamin Berger, son of Chaim Berger, a founder of the 41-year-old village: the first incorporated Jewish community in the United States. The others are Kalmen Stern, 40, and Jacob Elbaum, 38.
Chaim Berger was indicted in the case but has fled the country. He is considered a federal fugitive along with two other men, Nathan Adler and Avrum David Friesel, son of the only mayor New Square has ever had. The three have escaped to Israel, according to court testimony, and a request for extradition has been made to the Israeli government.
An Israeli spokesman said he not know the status of the American request. The convicted Brooklyn man is David Goldstein, 52, who faces a maximum prison sentence of 10 years for embezzlement and five years on conspiracy and fraud charges, and a $250,000 fine, federal officials said. Stern and Elbaum face similar punishment, as well as three years on a tax charge.
Benjamin Berger, 37, could receive 11 years in prison on conspiracy and tax charges, and 20 years for money laundering. He also could be fined a total of $750,000.
Among the programs defrauded were the state’s Tuition Assistance Program, a Small Business Administration program for minority-owned businesses and a Section 8 Housing and Urban Development rental subsidy program. Landis said the stolen millions were used to support New Square’s educational and social institutions.
"The money is going … to the Yeshiva of New Square, going to support the community, their common goals, their common objectives," she told the court.
New Square spokesman Rabbi Mayer Schiller said the community is in shock and pain over the convictions. "They definitely didn’t expect it," he said of the 7,000-member community under the leadership of the Skverer rebbe, David Twersky. Rabbi Schiller said the village believes U.S. attorneys are picking on the chasidim and could have settled the cases without prison sentences.
"The sense of the community is that at times the system fails, and this time the system failed tragically," he said.
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Sentencing is set for April 26. Rabbi Schiller said he expected appeals to be filed.
Rabbi Twersky has not issued any public comment. He cut short a trip to Montreal Monday after hearing of the conviction, a village official said.
