NEW BRUNSWICK — A Lakewood rabbi who runs a school for children with developmental disabilities pleaded not guilty Monday to charges of stealing public funds for personal use.
Osher Eisemann, 60, the founder and director of the School for Children with Hidden Intelligence in Lakewood, is accused of using a private fundraising nonprofit for the school to launder $630,000 in public tuition funds.
He was indicted last month on charges including theft, money laundering, corporate misconduct and misuses of government funds.
Eisemann, through his attorney, pleaded not guilty to all charges before Superior Court Judge Benjamin Bucca in Middlesex County.
Deputy Attorney General Anthony Robinson told Bucca the state has offered a plea deal that would require a prison sentence of five years in exchange for Eisemann admitting to a second-degree charge of theft by unlawful taking. As part of the plea deal, Eisemann would also pay restitution, Robinson said.
Eisemann, of Lakewood, faces up to 15 years in state prison on the charges.
An attorney representing Eisemann, Lee Vartan, declined to comment after the brief court hearing. However, Vartan maintained his client’s innocence in a previous statement given to NJ Advance Media.
“Rabbi Eisemann has never taken any SCHI funds for his personal use, and we strongly deny that there was any ill intent in the use of SCHI funds,” Vartan said in the statement. “We look forward to the complete exoneration of both SCHI and Rabbi Eisemann in this investigation.”
Schools, zoning, poverty rate pose questions about town powers
SCHI receives $1.8 million a month in public tuition from the Lakewood School District to teach students with special needs. Authorities said Eisemann took $430,000 of that money for a personal business venture, the clothing company TAZ Apparel, LLC.
Authorities said Eisemann also laundered an additional $200,000 of the funds in a scheme “intended to make it appear that he was repaying debts he owed to the school using personal funds.”
SCHI officials previously called the attorney general’s investigation “baseless” and said the school has a long history of providing a “superior level of services to meet the unique needs of severely-disabled, medically fragile, and socially-emotionally challenged children and youth adults.”
An attorney representing SCHI, Robert Rabinowitz, declined to comment after Monday’s arraignment.
Attorney General spokesman Peter Aseltine said the arraignment was held in Middlesex County because three of the districts that send children to SCHI are in the county: Highland Park, Edison and Monroe.
Eisemann is scheduled to be back in court on June 12.
Anyone familiar with the ultra-Orthodox community would know that the children are not permitted to use the internet. They are barely permitted to use a library, except per-say one that has a wealth of religious information, texts, commentaries, and perhaps (perhaps) articles of recent scholars. But, only those limited to religion.
There is no math research. There is no science research. There is no learning about the moon and the stars and NASA on the sites available for such study. There is no internet access to Google and Yahoo and all of the many sites that non-ultra-Orthodox children use when they want to ask a question or find out information or G-d forbid sneak some peak at illicit pictures.
CHILDREN ARE DENIED ACCESS TO COMPUTERS AND THE INTERNET, DA ZUGIBE!
Ultra-Orthodox children do not use websites. They do not read “online” newspapers. Anyone who makes claims to the contrary is simply telling a broad untruth. The percentage of e-rate dollars scattered throughout the ultra-Orthodox community is simply not supported by the number of children within that community permitted to use those dollars for education…. roughly… ZERO!!!Continue reading →
Brooklyn ‘Millionaires’ Busted for Stealing $1.3M in Benefits, Feds Say
WILLIAMSBURG — Three Brooklyn couples, including a landlord with properties all over the borough, were arrested Tuesday on charges of defrauding the government of $1.3 million worth of benefits.
Shlomo Kubitshuk, 38, and his wife Rachel, 39, Naftali, 40, and Hinda Englander, 41, and Leib, 39, and Devorah Teitelbaum, 36, were accused of lying about their income to the federal government as far back as 2001 in order to collect thousands of dollars worth of food stamps, Section 8 housing vouchers and Medicaid.
“For over a decade, this ring of six defendants allegedly lied to city and federal officials about their financial status in order to obtain benefits that were meant for the needy,” said U.S. Attorney Preet Bharara.
The six were slapped with a multiple counts of conspiracy to steal government funds and theft of government funds, which carry a five and ten year maximum sentence respectively, court documents show.
In two separate complaints unsealed Tuesday, prosecutors said the six benefited from $457,000 in Section 8 vouchers to pay for NYCHA apartments, $130,000 in food stamps and $733,000 in Medicaid payouts.
“At a time when affordable housing is scarce and there is a waiting list for Section 8 vouchers, it is reprehensible that some New Yorkers went without so that these defendants could have still more,” said Department of Investigations Commissioner Mark Peters.
Shlomo Kubitshuk owns multiple properties across Brooklyn, according to prosecutors, including 56 Grattan, 98 Grattan St. and 177 Montrose in East Williamsburg, 327 Melrose St., 318 Melrose St. and 1436 Greene St. in Bushwick and 1144 Bergen St. in Prospect Heights.
The state had records of Kubitshuk taking in $560,000 in rental income in 2013, and in multiple applications for mortgages he said his assets were worth more than $2 million, prosecutors said.
His wife said she took in $300,000 in annual income through another LLC company on a 2013 credit card application, according to the complaint.
Despite that, the pair claimed only $13,409 a year in combined income for around a decade in order to qualify for federal subsidies, federal prosecutors charge.
Naftali Eglander, owner of a U.K. real estate company City Gate Estates Limited worth more than £600,000, and his wife Hinda disclosed only $15,858 in combined annual income between 2001 and 2013, prosecutors said.
Finally Leib Teitlebaum, president of the online jewelry company www.glitzs.com, professed to earn about $1.2 million a year in a 2006 credit application, according to the state, yet disclosed far less.
“These defendants were millionaires stealing from the poor,” said Peters. “The defendants fraudulently concealed their wealth to obtain benefits.”
Ramapo Councilman Samuel “Shmuel” Tress is expected as soon as tonight to resign from office and plead guilty to official misconduct, according to sources familiar with the case.
The plea deal, which would drop a felony charge, would likely enable Tress to avoid jail time in the case.
Tress, 71, a Democrat who won election in November despite a federal mail fraud conviction, is accused of voting for a zone change on a housing development he held a financial stake in — even though he had signed an affidavit statinghe wouldn’t profit from his decisions as a Zoning Board of Appeals member.
Under the plea agreement, Tress must send a letter to Ramapo resigning from the councilman position he’s held since January. He also is expected to face a fine.
The Airmont Justice Court session is scheduled for 5 p.m.
Rockland District Attorney’s Office detectives arrested Tress in March on a felony count of first-degree offering a false instrument and the misdemeanor charge of official misconduct.
Ramapo Town Attorney Michael Klein declined comment on Thursday, as did Executive Assistant District Attorney Richard Kennison Moran. Tress’ attorney Michael Gilbert of Manhattan did not return a telephone call seeking comment.
The resignation would end Tress’ short career as an elected official. Tress won election to a four-year term in November running with Supervisor Christopher St. Lawrence and Democratic Councilwoman Brendel Logan-Charles. He succeeded Democrat Daniel Friedman, who lost a September 2015 primary after he lost community support following a falling out for his criticism of St. Lawrence.
The all-Democrat Town Board would be tasked with appointing someone to fill the open seat.
Tress was a longtime member of the Zoning Board of Appeals before running for town council. He admitted to The Journal News in October 2015 that he owns a home in Lakewood, New Jersey, but claimed he spent most of the week in an Kearsing Parkway apartment in Monsey. He is the CEO of East Morgan Holdings, a Lakewood, New Jersey-based remediation company.
Court records show Tress pleaded guilty in December 2004 to a felony charge in a federal fraud case. He admitted he falsely assumed an identity to obtain a home mortgage loan from a bank in connection with the purchase of a home in Spring Valley. He was sentenced in March 2005 to three years of supervised release.
Tress’s recent arrest came after the District Attorney’s Office detectives scrutinized his ZBA vote on May 4, 2015, to approve eight zoning variances for what was then a single-family house at 142 Blauvelt Road in Monsey. The grassroots political party Preserve Ramapo provided the prosecutor’s office with more than 100 pages of documents on Tress.
Tress on May 14, 2015, had filed a disclosure affirmation with the town asserting that he had not and would not engage in any activity that would provide a personal or pecuniary gain to himself in relation to his duties as a member of the Zoning Board of Appeals, prosecutors contend.
Tress denied to a Journal News reporter that he profited from the ZBA approval.
Documents obtained by The Journal News before the arrest, however, showed Tress and his wife contracted to sell the single-family house for $500,000 to builder Samuel Wettenstein of Spring Valley in May 2013. Wettenstein obtained a demolition permit from Ramapo for his plan to build three condominiums and three accessory apartments on the property.
But the couple ended up with a 40 percent share of the property when the development stalled and Tress and his wife were still owed $150,000, according to town documents on the variance vote and a November lawsuit Tress filed against the buyer. The case was dropped last month, according to a document on file with the Rockland County Clerk’s Office.
Tress’s potential conviction adds to the list of politicians facing or sentenced for corruption charges in Rockland County, where District Attorney Thomas Zugibe’s office is part of an anti-corruption task force working with the U.S. Attorney’s Office in Manhattan.
ELM STREET, ROCKLAND COUNTY – NOT AFFORDABLE HOUSING, BELOW FAIR-MARKET INVESTMENT STEALS!
In 2011, the Ramapo Local Development Corp (think Christopher St. Lawrence and Aaron Troodler, et.al. SEC complaint) began selling units in a housing project referred to in social circles as the “Rockland Affordable Housing” project. The development was allegedly intended to be purchased by people who wanted homes but could not afford them and by design the target buyer was ultra-Orthodox. What in public was billed as affordable housing in private was nothing more than below market investment properties which would eventually yield buyers profits in the millions when they decided to sell.
The homes were purchased in large part by numerous LLC’s, many of which were and continue to be untraceable non-profits and tax-exempt entities. The homes were not purchased by the downtrodden.
One of the names among the owners is the family of Yossi Gestetner who lives in one of the Elm Street properties. He is one of the founders of OJPAC, a Political Action Committee heavily involved in endorsing the same corruption that makes up the fabric of Rockland County’s ultra-Orthodox Jewry, particularly as it connects to the Borough Park community. His ties to Dov Hiking and Boro Park’s elite Shomrim are no secret.
It also comes as no surprise that David and Naomi Bodner were among the first “buyers” of the property when the LDC started selling it. You know. The same Bodners who are involved with Marty Huberfeld and Platinum Parnters. The same Bodners who have more money than they could spend in a century of generations of lifetimes, much of it we surmise was amassed in less than savory transactions.
For your review we have included the SEC Complaint against Christopher St. Lawrence and his accomplices naming the Elm Street properties voraciously. We have also included articles picked up by Failed Messiah and a number of others.
This Elm Street properties are one family of the CSL LDC properties among many that heavily tie Rockland County’s Hasidic and ultra-Orthodox community (and its leaders) to Boro Park, and to some of New York’s dirtier politics. They also tie Rockland County to family Bodner and many of its family foundations. We expect there are more treasures to be found beyond what has been named over the years.
RAMAPO — A Rockland County housing agency representing the federal government is reviewing Ramapo’s affordable-housing project on Elm Street, based on a complaint that investors bought up most of 24 units already sold, for potential rental properties.
Bruce Levine, a former legislator and Spring Valley village attorney, also sent his complaint to the state Comptroller’s Office and Attorney General’s Office. Levine asked for an investigation into what he called “abuses and illegalities” by Ramapo and its quasi-economic development agency, the Ramapo Local Development Corp.
The corporate ownership and condominium rentals could jeopardize $1.44 million from the state and $200,000 from the federal government aimed at lowering the cost of the units, which were priced at $349,000 for the first 48 units.
The complaint states that County Clerk’s Office records show 17 of approximately 24 condominiums already sold have been purchased by limited liability companies, a business entity that’s not a corporation.
Only seven units sold so far by the Ramapo Local Development Corp. are owned by people, the complaint says. Five of those individuals gave Brooklyn addresses, one signed was by an LLC owner in Ramapo, and one gave a Monsey address.
Before federal agents raided the offices of Platinum Partners in June, the $1.2 billion hedge fund had been reporting robust returns, thanks partly to oil fields it owns in California.
Platinum counted the oil fields as its most valuable asset, worth many times what it paid for them, according to its most recent audited financial statement. But the project was a flop that never produced much oil and wasn’t worth nearly as much as Platinum said, according to three people who were involved with the operation and who asked not to be named discussing the private business.
Whether Platinum properly accounted for hard-to-value assets, including the oil fields, is at the center of a probe by federal prosecutors in Brooklyn, according to a person with direct knowledge of the matter. Illiquid assets like the oil fields accounted for about $800 million of the firm’s main fund at the end of 2014, according to the financial statement.
Platinum, which has reported average annual returns of 17 percent since 2003, reassured investors after the raid that its valuations are accurate and they’ll get all their money back, plus gains. Montieth Illingworth, a spokesman for Platinum, declined to comment for this story, as did a spokeswoman for Brooklyn prosecutors.
Focus on Lending
Mark Nordlicht, a commodities trader, founded Platinum in 2003, with seed money from Murray Huberfeld, a penny-stock trader from Brooklyn whose family owned kosher restaurants. Huberfeld was well-connected in New York’s orthodox Jewish community and raised money from some of its wealthiest families.
Huberfeld was arrested in June for allegedly bribing a union chief to invest in Platinum and pleaded not guilty. Nordlicht has not been accused of wrongdoing.
Platinum’s specialty was making secured loans at high interest rates, some to risky companies like payday lenders, and taking stakes in borrowers. By 2012, Platinum’s initial investors had quadrupled their money.
Platinum had been lending to energy companies, and with the price of crude rising in 2012, Nordlicht decided it was time to take a more active role in drilling. Oil had more than doubled from its 2008 lows to about $100 a barrel.
In April 2012 Platinum spent an initial $6.5 million to buy into Golden Gate Oil, a 2,000-acre string of oil fields in California’s Santa Maria Valley, about 150 miles northwest of Los Angeles.
The fields had been drilled extensively by Unocal Corp., now part of Chevron Corp., which abandoned them in the 1980s. The plan was to drill in new locations between some of Unocal’s more widely spaced wells, said Stephen Lieberman, a petroleum engineer who helped put the Golden Gate deal together and then consulted for the firm for a few years. Golden Gate didn’t return messages seeking comment.
Nordlicht visited the fields several times to meet with the oil men and discuss the drilling plans, Lieberman said. The hedge fund founder wasn’t an expert on the engineering but believed in the project’s potential, he said.
“I had to train this guy, Nordlicht, on what he was doing and why we were doing it,” Lieberman said. “He picked it up like crazy.”
Platinum commissioned a report by oil appraiser DeGolyer and MacNaughton. The firm said in its 2013 report that the fields held 16 million barrels of proven reserves worth more than $600 million. DeGolyer and MacNaughton declined to comment.
A reserve estimate measures how much oil can be profitably extracted from a field at current prices. If drilling proves more difficult than expected, or prices drop, an explorer might not be able to produce that much.
Golden Gate drilled six wells in 2012, but only one ever produced more than a token amount of oil, records from California’s oil regulator show. To boost production, the company decided to start drilling horizontally — wells that started downward, then curved to approach the oil from the side.
Two J-shaped wells were drilled in January and February of 2014. Oil workers missed the payload because they couldn’t turn the drill hard enough to reach it, Lieberman said.
Platinum spent several million dollars in preparing to drill these wells and Nordlicht got angry when he learned of the failure, Lieberman said. Nordlicht then fired Golden Gate’s chief executive.
Valuing Oil Assets
The drilling problems weren’t mentioned in June 2014 when Sterling Valuation Group Inc. prepared one of the periodic reports on Platinum’s portfolio that the hedge fund used to calculate its results. Sterling Valuation said Platinum’s stake in Golden Gate was worth $176 million as of March 31.
Sterling said in the report that Platinum told it that Golden Gate’s eight wells were producing around 60 barrels each per day as of the end of March. That’s a lot more than the production figures in the California records. They show seven of the eight wells were idle for the first three months of 2014, and the one active well produced 36 barrels a day. In 2013, Golden Gate’s total production averaged 41 barrels per day.
The three people who were involved with the operation said the Sterling valuation was too high. One of them estimated the oil fields would have fetched about $10 million at the time.
Sterling, which stopped working for Platinum last year, said in a statement that its valuation report was based on information largely provided by Platinum and the DeGolyer and MacNaughton report.
“If Platinum Partners and others provided incomplete or inaccurate information, then we would no longer stand by the report,” the statement said.