Brooklyn yeshiva agrees to pay $5 million in fines in school lunch fraud case
A Brooklyn-based yeshiva has agreed to pay $5 million in fines for stealing millions in a school lunch fraud case. The fines come after it stole millions from a federal school lunch program for needy children.
After admitting to stealing more than $3.2 million by claiming it had started a school supper program which didn’t actually exist, the Central United Talmudic Academy (CUTA) in Williamsburg entered into a deferred prosecution agreement with the government.
This agreement comes about four years after the yeshiva’s leadership at the time, former executive director, Elozer Porges, and onetime assistant director, Joel Lowy, pleaded guilty to conspiracy to commit mail and wire fraud.
The school has already paid back $3.2 million in restitution to the U.S. Department of Agriculture and the state Health Department. It now has to pay $5 million in penalties on a 36-month schedule without using insurance money to cover the bill.
The yeshiva must also submit to an independent monitor, make a series of organizational changes, and never hire Porges or Lowy again.
“Today’s resolution accounts for CUTA’s involvement in those crimes and provides 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,” U.S. Attorney Breon Peace said Monday.
Porges was sentenced to two years in prison while Lowy got five years of probation and was required to pay $98,400 in restitution.
In his sentencing memo, it’s confirmed that Porges was paid by the school a yearly salary of more than $150,000 to “among other things, make sure that it could provide its services while asking as little as possible from its financial backers and its student families.”
“The evidence shows that he accomplished this by fraud: he invented a fake dinner program for needy children, applied to the government for the funds to run that program, and diverted those funds to unrelated expenses,” the 2019 government filing reads.
“It is unclear whether Porges received a specific bonus for this perfidy; but, Porges was the director of CUTA, he orchestrated these brazen acts of fraud, and he was paid very well for it.”