Lakewood, Welfare Fraud and Targeting a Community? Really?



TOMS RIVER – Four men arrested in sweeping raids targeting welfare fraud in Lakewood pleaded guilty to theft and tax charges Wednesday, agreeing to repay every penny they stole or face prison time. 

Tzvi Braun, Yisroel Merkin, Samuel Serhofer and Eliezer Sorotzkin took turns quietly walking from the back bench of an Ocean County courtroom to the witness stand.

Each spoke just a few words, admitting to Superior Court Judge Wendel E. Daniels that they filed false tax returns and under-reported their incomes, allowing them to obtain Medicaid and other government assistance benefits worth between $54,000 and $74,000.


They agreed to repay the benefits they received as part of a pretrial intervention program, a year-long probation-like program commonly offered to low-level, first-time offenders. If they make full restitution and follow other terms of the program, the charges against them will be dismissed. 

The 40-minute hearing marked the first resolutions of the 26 cases brought against Lakewood residents in multi-agency raids in June and July of 2017. 

What happened in the small, wood-paneled courtroom was largely routine. But what has transpired outside of the courthouse since the raids has been much bigger. 

The early morning arrests came amid a years-long investigation targeting welfare fraud in the township, and prompted thousands of people to withdraw from government assistance programs.


And the office of state Comptroller Philip J. Degnan crafted an amnesty program, allowing others to come forward and repay benefits to avoid criminal prosecution. That program ultimately recovered less than half of what it was supposed to, prompting additional controversy and an ongoing lawsuit. 

MEDICAID FRAUD: Lakewood board member repays half owed in amnesty deal, builds $500K house

$2.6M never repaid because of Medicaid amnesty deals


Lawyer Yosef Jacobovitch, who represented Braun, Merkin, Serhofer and Sorotzkin, on Wednesday decried the investigation in its entirety saying it targeted the Orthodox Jewish residents of Lakewood.


“The fact that no one outside the community was arrested, charged or placed into amnesty was quite telling that this was a targeting,” he said. “If everybody would be upset or angry that would be rightfully so. But I believe today we resolved the cases in the best way that we can.”


What’s worse, he said, was the investigation led by the New Jersey comptroller treated people even within the Orthodox Jewish community unfairly. He said his clients were picked at random by a former comptroller staffer to face the harshest penalties.

“Just the sheer bad luck of having been the ones that were picked for arrest versus the ones that were picked for amnesty” has had a devastating impact, he said. 

The comptroller’s office says Jacobovitch has it wrong.


“There was no purposeful targeting of any specific community in Ocean County,” said C. Andrew Cliver, the lead attorney in the comptroller’s investigations division and an office spokesman.


“This was not an investigation designed to target the Jewish community or any other community,” he added, denying Jacobovitch’s claim that certain residents were “picked” to face criminal prosecution. “It was an investigation where investigators followed the evidence to where it took them. And it took them to those 20-some defendants that were arrested.”


The Ocean County Recipient Voluntary Disclosure Program, the formal name of the amnesty offer, was open to all residents of Ocean County who chose to come forward, Cliver said. 


“The program was designed in a way it could not target anybody,” he said. 

Braun, Merkin, Serhofer and Sorotzkin each must pay half of their restitution before entering the pretrial intervention program. If they are unable to pay the remaining amount, they will face prison terms of up to 10 years.

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Brooklyn Landlord Allegedly Also Brothel Owner…. And then There’s Lakewood



Brooklyn landlord with $87M portfolio charged with running prostitution ring out of his buildings

Isaac Schwartz, who owns 48 properties through shell corporations, was arrested last month for enterprise corruption and conspiracy.

UPDATED, Wednesday, Nov. 14 at 11:16 p.m.: One Ditmas Park resident thought he had it bad enough after enduring bed bugs, bulging walls and a hole in the ceiling. But then he learned his building was being used to service an illegal brothel.

Another Park Slope resident also learned there were apartments being used for prostitution in her building.

Both residents had the same landlord, Isaac Schwartz, a regular on the New York City public advocate’s “worst landlord” list who was arrested last month after police discovered a prostitution ring operating in his buildings, according to The New York Times.

Schwartz’s arrest highlighted the role complicit landlords play in enabling illegal prostitution rings to operate in residential buildings. Police alleged that four of Schwartz’s Brooklyn properties,

2007 Foster Avenue483 4th Avenue880 Gates Avenue and 203 Onderdonk Avenue, had housed brothels, as part of a prostitution ring run by a former police detective. The landlord pleaded not guilty and was released without bail on his own recognizance. According to the Times, Schwartz’s portfolio numbers 48 buildings valued at about $87 million.

Citing housing court documents, The Times reported that Schwartz, who works as an EMT in Borough Park, runs his rental company with Mendy Lowy and a contracting firm, Powerful Electric, with his brother-in-law Shalon Seelfreund. Schwartz and Lowy were also connected to a strange kidnapping ring in Lakewood, New Jersey. Schwartz and Lowy paid $2 million in bond to secure the release of a rabbi and another man charged with abduction and assault related to divorces in the Orthodox community, the Times reported.  [NYT] — David Jeans

Correction: An earlier version noted Schwartz was the developer behind a project in Bedford-Stuyvesant, Brooklyn; it’s a different developer with the same name. 

Medicaid Fraud Lakewood – Helping the Fraudsters while the Honest Get Screwed and Moshe Tress



It is one thing to assist a person in paying overdue taxes accumulated because of medical problems, errors, stupid mistakes. It is one thing to assist people with money for lawsuits, unanticipated medical bills and other life events. Medicaid fraud is not a life event. It is a concerted effort to game a system and then circumvent the intention of providing amnesty.

It is also quite another to assist a person in paying back fraud when the entire fraud is not actually repaid and there is total and complete amnesty involved. The true victims of this fraud, particularly where Medicare and Medicaid are concerned are the people who have been denied assistance because there were simply not enough funds available or they did not meet the criteria.

Setting aside the fact that we don’t believe that 99% of the people in the ultra-Orthodox community meet the criteria (particularly if they have such generous benefactors). A drive through Kiryas Joel, Lakewood and numerous other towns will provide razor sharp clarity that many claim poverty and then drive around in $90K cars or wear $10K streimels to their simchot.

Perhaps Mr. Tress and his generosity towards his community should have carried over to the thousands in need of Medicare/Medicaid who were ineligible because his community had drained resources. Perhaps he should take a walk through places like downtown Newark and hand out some of his generosity there.

As to the charity he set up to spread his generosity, we note that there was far more about other companies owned by Mr. Tress than there was about the charity he set up allegedly to help the fraudsters.

We finally note that that the ultra-Orthodox community is extremely savvy – exceedingly so. We find it hard to believe that, as he quoted, that they could have been obvlivious to the fact that what they were doing was wrong. We believe that they gamed the system.  Mr. Tress, your charity and mitzvot might be better spread turning less than honest people into honest ones and helping those genuinely in need of assistance.


Medicaid fraud Amnesty Program By the Numbers


Medicaid fraud: Lakewood Orthodox community raises money to help amnesty seekers

Many families in Lakewood who cut deals in last year’s Medicaid fraud amnesty program paid little out of their own pockets, the Asbury Park Press has learned.

Instead, families that could not come up with enough money to repay their debt to the government borrowed from a pool of funds donated by a few dozen people, according to Moshe Tress, who also goes by the first name Mark and who helped organize the fundraising effort. The money was distributed on an honor system that borrowers would repay it if and when they were able, and without interest or a fee, Tress said.

Tress said such charity is second nature for Orthodox Jews, who make up the majority of Lakewood’s population. But a state senator says using donations to repay benefits allowed Medicaid cheats to escape without punishment.

“My fear there is the perception, and the reality will be that these people ended up profiting from their dishonesty and their illegal behavior,” said Sen. Declan O’Scanlon, R-Monmouth. “And that the punishment is nowhere near as severe as the punishment ought to be for such action.”

O’Scanlon said he will propose legislation because of the Press’ reporting on the amnesty program. He wants more rules and restrictions for any future amnesty offers, including that restitution must be paid in full. The state recouped $2.2 million through the amnesty program and $2.6 million was not repaid because of the deal making.

“This isn’t a victim-less crime,” O’Scanlon said. “There’s a finite amount of money available for truly needy people. When someone steals money they are stealing it from truly needy people.”

But Tress said some individuals applied for amnesty not knowing if they did something wrong. The Office of the State Comptroller, which offered amnesty, did not vet whether an applicant received Medicaid benefits they were not qualified for. Tress said many residents entered the program with a “better safe than sorry” mentality.

“We don’t pay for fraud,” Tress said. “The program was designed with so much unknown, people said better safe than sorry.”

Tress is a noted philanthropist in Lakewood and his company, Cedar Holdings LLC, owns real estate and healthcare facilities across the tri-state area.
He said donated funds went to help families with a legitimate financial need.

“The community at large raises millions of dollars a year to help people,” Tress said, speaking specifically of Lakewood’s majority Orthodox Jewish population. “That’s what we do. People care about other people. We step up to the plate in any situation that is a tragic situation, or a situation that needs camaraderie. This is one of those cases.”


Lakewood board member repays half owed in amnesty deal, builds $500K house

State: $2.6M never repaid because of amnesty deals

Last year 159 Ocean County residents entered the comptroller’s special amnesty program in the wake of sweeping raids that netted 26 arrests in Lakewood. Thirteen Orthodox Jewish couples were arrested in the raids and charged with fraud. Those charges are pending, and in most of the cases plea deals are being negotiated.

Until the Press contacted the comptroller’s office Wednesday, the office was not aware that a community fundraising effort allowed some amnesty participants to repay money owed, according to C. Andrew Cliver, attorney in charge of the comptroller’s investigations division and a spokesman for the office.

“The deal was, you owe the state this amount of money, you need to make the state whole for the amount of money in the agreement,” Cliver said. “How they came to collect the money was not something we were aware of and (we) have no comment as to the appropriateness of that.”

After it was announced, the amnesty program was criticized quickly in the national media and by local advocates as favoritism for Lakewood’s Orthodox Jewish community. Comptroller Philip J. Degnan, who was nominated for a Superior Court judgeship in September, has stood by the program as a success, saying in a report that it recouped four times as much money in just a few months than criminal prosecutions had returned to the state in seven years.

But the problems circling around the program haven’t waned even a year later.

The Press revealed last month that though Degnan said repayments must be made in full, his office offered discounts of up to 50 percent for participants. A total of $2.6 million was not recovered because of the deal making.

And one person granted amnesty was Moshe S. Newhouse, an elected member of the Lakewood Board of Education who entered into a contract to buy a $500,000 house just days before he applied for amnesty. It is unclear if Newhouse borrowed money to repay the $24,000 in Medicaid benefits he owed the state, an amount reduced from the $48,000 in benefits Newhouse received for three years between 2013 and 2015.


O’Scanlon, the senator, is considering legislation to prevent individuals who partake in amnesty programs from serving in public office for a period of time and to require full repayment of benefits received from all participants.

“I understand there are times when it’s beneficial to the public for there to be some flexibility to these investigations and having people self-report their mistakes,” he said. “But there have to be consequences as well … Permitting people to keep some of the money they stole cannot happen again.”

He said Newhouse should resign his post.

Melinda Murray, a Lakewood public schools bus aide, calls for Moshe S. Newhouse to resign during a board meeting on Oct. 24, 2018. Stacey Barchenger, @sbarchenger

“That should happen right now,” O’Scanlon said. State Sen. Robert Singer, a Republican whose district includes Lakewood, has not responded to calls from the Press seeking comment on the amnesty program.


Who knew of amnesty deals? Memo says several

Hundreds of Lakewood Medicaid fraud cases can’t be prosecuted, lawsuit says

The comptroller’s office is also now facing a lawsuit over the program, filed Tuesday by a former employee. Andrew Poulos Jr. said in his civil lawsuit that he was fired in retaliation for disputing claims made by one of his supervisors that Poulos went rogue and acted without approval when he negotiated lower repayment amounts.

Degnan has said an employee acted alone to offer discounts, but Poulos’ lawsuit and a November 2017 memorandum obtained by the Press say supervisors in the comptroller’s office were aware of the deal making.

O’Scanlon said he has also had discussions with the comptroller, who is charged with rooting out fraud and waste in state government, encouraging further investigation to determine who inside the office knew reduced repayments were being offered.

“That’s something that we all need to know,” he said. “We pay all their salaries. There were deals cut here that I believe were inappropriate. Taxpayers have a right to know who cut them.”

It’s unclear how much restitution money was raised through community donations and how many of the 159 amnesty applicants relied on those dollars. The comptroller has said 159 people were granted amnesty through 81 settlement agreements, meaning each settlement agreement included an average repayment of about $27,700.

“Most of the repayments that were made were actually collected from charities,” attorney Yosef Jacobovitch told the Press. Jacobovitch represented many people who sought amnesty, but said his role did not include any discussions of how the money was repaid. Jacobovitch said many people who sought amnesty had dire financial needs and were unable to repay vast sums on their own.

To read the remainder of the article click here.


Encryption as the New Way to Overcome the Law – Blue Claw – Encryption to Safety


Hundreds of Lakewood Medicaid fraud cases can’t be prosecuted, lawsuit says


Hundreds of Medicaid fraud cases stemming from a 2017 crackdown in Lakewood cannot be prosecuted because details of those investigations are trapped in encrypted files on a state computer, a former employee claims in a lawsuit filed Tuesday.

Andrew Poulos Jr., who ran a controversial Medicaid fraud amnesty program for the Office of the State Comptroller last year, says in the lawsuit filed in state Superior Court in Mercer County that he was made a scapegoat for the program and has been subject to a “public smear campaign.”

His lawsuit also alleges new details of the amnesty program and the overarching investigation, including that cases were left on the table.The encrypted investigatory files, which could lead to the prosecution of potentially “hundreds of Lakewood fraud cases,” were on Poulos’ computer when he was fired, the suit claimed.

The suit stated that Poulos was “the only one with access to the information.” The comptroller has made no attempt to reach Poulos for the password to the files, the suit states.

The amnesty program was offered in late 2017 after high-profile raids led to the arrest of 26 Lakewood residents on charges they under-reported their incomes to qualify for Medicaid, food stamps and housing benefits. One couple was indicted Oct. 24 on 10 counts connected to Medicaid fraud, court records show. Plea deals have been offered to most of the other defendants, Assistant Ocean County Prosecutor Christopher Heisler told a judge during a brief Tuesday morning court hearing.

Poulos’ lawsuit also states that:

  • Amnesty applicants did not have to repay benefits received on behalf of their children, which kept all repayments under $75,000 per family.
  • Former comptroller Matthew Boxer, who grew up in Lakewood, represented at least one amnesty applicant and the interests of the Lakewood Vaad, a group of Orthodox Jewish businessmen and rabbis who advocate for some in Lakewood’s Jewish community.
  • The years-long effort by Poulos to investigate Medicaid fraud in Lakewood’s Orthodox Jewish community was dubbed “Operation Blue Claw.” The Lakewood BlueClaws is the minor league baseball team in the township. The team had no connection with the raid.
  • On June 26, 2017, the first day of early morning raids and arrests in Lakewood, three people went to the comptroller’s office seeking a meeting. Those people were Lakewood Committeeman Meir Lichtenstein, attorney Yosef Jacobovitch and real estate investor Moshe Tress. The men wanted to discuss the amnesty program that they’d learned then-Ocean County Prosecutor Joseph Coronato had been working on. Previously the comptroller had said the amnesty program was his office’s idea.

MEDICAID FRAUD: Lakewood board member repays half owed in amnesty deal, builds $500K house

MEDICAID FRAUD: $2.6M never repaid because of amnesty deals

MORE: Who knew of amnesty deals? Memo says several

Lichtenstein, Jacobovitch, Boxer and Tress are not named as defendants in the lawsuit.

The suit seeks unspecified damages under the state’s Conscientious Employee Protection Act.

Poulos was the point person for the amnesty program, which allowed 159 Ocean County residents to avoid criminal prosecution and repay more than $2.2 million in Medicaid benefits they received but were not entitled to.

It wasn’t until this month that the Asbury Park Press revealed that participants in the 2017 program, including Lakewood Board of Education member Moshe S. Newhouse, were offered discounts of up to 50 percent on the amount of benefits they had to repay, even though state Comptroller Philip J. Degnan had said benefits would be repaid in full. Ultimately $2.6 million in benefits were left on the table as a result of lowered repayments, the comptroller later confirmed.

Newhouse later faced a call to resign his post — see it in the video at the top of this story.

Degnan said an employee acted on his own in offering the amnesty deals. Sources with knowledge of the program identified that employee as Poulos. But internal memorandums first reported on the by the Press and repeated in Poulos’ lawsuit say his superiors knew that repayments would be reduced.

The Office of the State Comptroller, which offered the amnesty program, and Joshua Lichtblau, the director of the comptroller’s Medicaid fraud division, are defendants in the lawsuit.

The comptroller’s office declined to comment on the lawsuit.

Poulos, who lives in Ocean County, had worked for the comptroller’s office for six years before his position was terminated. He was never disciplined during that time and received the Comptroller’s Award for Excellence for Operation Blue Claw just two months before he was fired, his lawsuit says.

“Mr. Poulos worked tirelessly to uncover and put an end to Medicaid fraud within Lakewood’s Orthodox community,” reads a statement provided by his lawyers, Mathew A. Luber and Peter M. Draper of the law firm McOmber & McOmber in Marlton. “As alleged in the complaint, his unlawful termination is just another classic case of retaliation by New Jersey political operatives who, rather than face public scrutiny for their own decisions, terminated our client when he blew the whistle on an attempted coverup. Mr. Poulos looks forward to exposing the lies, to setting the record straight, and to restoring his reputation.”

In late November, when Jacobovitch and Tress presented Poulos a way to bring more people into the amnesty program, things started to unravel, the lawsuit says. An internal memorandum written by Poulos says his supervisors, including Lichtblau, knew and even signed off on allowing negotiated repayment terms.

But then Licthblau got a call from former comptroller Boxer, upset that his client previously repaid the full amount of benefits. Lichtblau worked to conceal that he had signed off on the settlements himself, and that ultimately led to Poulos’ removal from his role supervising the program, the lawsuit claimed.

“Defendants motivation to terminate plaintiff is clearly based upon their need to save political face with both the public and Mr. Degnan and to further cover up the fact that defendants failed to keep Mr. Degnan advised of the details of the amnesty program settlements,” the lawsuit stated.

Degnan has been nominated for a Superior Court judgeship in Morris County.

Poulos ultimately raised a concern with his immediate supervisor and the comptroller’s chief of staff that Degnan was not being given the truth about the negotiations, according to emails obtained by the Press. That was Dec. 11.

When the Investigators Need to be Investigated… Lakewood, New Jersey and Medicaid Cheats (and their helpful investigators)


One of the lead investigators into the prevalent welfare fraud in Lakewood and Ocean County was fired on the same day that officials gave Medicaid cheats as the deadline to turn themselves in.

Andrew Poulos, the former supervising investigator with the Office of the State Comptroller’s Medicaid Fraud Division, was terminated from his $95,300 job on Dec. 12 after six years, according to employment records obtained by New Jersey 101.5.

This is the third law enforcement or government position Poulos has left after questions were raised about his methods, according to legal documents and published reports.

It is not clear if Poulos was the Comptroller’s Office staffer who struck deals that allowed some applicants to pay back just half of what they owed. The deals meant that the Medicaid cheats got to keep $2.6 million, slightly more than what the state got them to repay.

State Comptroller Philip J. Degnan last week acknowledged that the deals ran against his public pronouncements that the people granted immunity from prosecution would be required to pay back all their ill-gotten gains. Degnan, nevertheless, defended the program, saying that the $2.25 million that the state did get back was more than his office had ever been able to recover.

Degnan this week said that the rogue staffer was removed from his position but would not name him or say whether he had been fired.

Degnan’s office on Tuesday confirmed that Poulos had been fired Dec. 12 but would not explain why, describing it as a “discontinuation of an unclassified appointment” of an at-will hire.

Poulos did not return several calls and emails requesting comment Tuesday.

In an email obtained by the Ocean County Politics website, Poulos last year defended the investigation — dubbed Operation Blue Claw.

From the time the arrests started in June until the end of September, the number of Medicaid recipients in Ocean County has decreased by 2,565,” he said in the October 2017 email to officials in the FBI, Justice Department, Social Security Administration, the State Treasury and the Ocean County Prosecutor’s Office.

“In a year-to-year comparison of Ocean County numbers, a consistent drop in the number of recipients has not occurred like this. With 2,565 less recipients in the program, it is an annual cost savings of approximately $12 million,” he wrote.

“Add in the impact of the criminal cases and the voluntary disclosure program that are ongoing, the operation has had an incredible impact, despite what the media prints. You should be extremely proud of the work you and your teams put into the operation.”

Two months later, Poulos would be gone.

In a report released Friday, Degnan said he learned of the deals three days before the Dec. 12 deadline.

His report was released a day after the Asbury Park Press revealed that a Lakewood school board member was among those granted amnesty and who paid back just half of what he owed despite having purchased a $500,000 home.

Documents obtained this year by Ocean County Politics revealed that the investigation into the pervasive welfare fraud in Lakewood began in 2015. The probe by the Comptroller’s Office, which is tasked with investigating Medicaid fraud, involved reviewing private school tuition and bank accounts of dozens of families. Investigators said that the average income reported by these families was just over $27,300 even though their actual income was, on average, more than $94,000.

Last year, county and federal authorities charged 26 township residents with cheating multiple public assistance programs out of more than $2 million.

ot long after the arrests, the Comptroller’s Office announced the Ocean County Recipient Voluntary Disclosure Program, which allowed residents in the county to self-report their accidental or intentional applications for government assistance that they were not entitled to. In exchange for not facing criminal charges, the applicants were supposed to repay what they took and stay off Medicaid for a year.

The program was criticized by people who felt that authorities were coddling lawbreakers and showing special favor to Lakewood’s predominant Orthodox Jewish community.

The amnesty program was open to anyone who had not already been charged with defrauding Medicaid. Degnan and prosecutors insisted that the program should not be called “amnesty” because the participants could still be prosecuted by state and federal tax authorities.

The program was started on Sept. 12, 2017, and was open for enrollment until Dec. 12, the same day Poulos was fired.

Degnan’s report noted that there were 81 settlements reached as part of the program, which resulted in 159 people being removed from Medicaid and more than $2 million being recovered.

In his report, Degnan admitted there were some “flaws and mistakes” in the program. While he did not name the person, Degnan said one employee in his office had “engaged in negotiations with counsel for applicants that resulted in settlements for less than the full damages amount.”

“This employee circumvented the established application process and safeguards and engaged in direct communication with applicants’ attorneys,” Degnan’s report said. “This conduct was contrary to the published terms of the Program and to my public statements regarding the OCRVDP.”

Degnan’s report does not say that the employee was fired, only that “appropriate steps were taken to end that practice.”

Poulos previously worked for the Army as a civilian commander of the Investigations Division at the former Fort Monmouth. He was stripped of his security clearance in 2011 after the U.S. Marshals Service complained to the Army about him using fake credentials to expose security flaws at military bases and federal courthouses in New Jersey, the Washington Post reported in 2011.

Although his Army superiors heaped praise on his work, the U.S. Marshals, which oversees federal building security, were not pleased, according to the Washington Post.

Last year, a federal court dismissed a lawsuit Poulos filed in 2013 against the New Castle, Delaware, police department, where he had previously worked. Poulos said New Castle police officials released his confidential employee files to federal investigators.

Poulos resigned from New Castle in 2003 after facing two internal investigations, his lawsuit said. The lawsuit said New Castle officials told federal agents that one of the investigations was for lying about a suspect trying to run him over with a vehicle. Poulos, however, said the investigation did not sustain any misconduct charges against him.



Hush, Hush Lakewood, money paid for silence regarding municipal affairs…


Lakewood paid township manager ‘hush money’ to stay silent, lawsuit alleges

Lakewood’s former township manager, who got a $327,000 severance package when he resigned in September, received illegal “hush money” to stay quiet about municipal affairs, a group claims in a lawsuit filed Monday.

The lawsuit alleges Lakewood Mayor Ray Coles “engaged in a conspiracy” with the former township manager, Thomas Henshaw, and other township officials, to reach Henshaw’s separation agreement.

Resident Larry S. Loigman, and a group called Lakewood Citizens for Fiscal Integrity, claim in the suit that the agreement violated state and local measures limiting the amount of money Henshaw should have received.

Henshaw’s separation agreement provided for $327,000 in payments, which includes his salary through the end of 2019. The suit claims Henshaw should have received far less money — just a few months’ salary.

“Such extraordinary payment was intended as ‘hush money’ to buy Defendant Henshaw’s silence as to municipal affairs,” the lawsuit stated.

The lawsuit was filed in Superior Court in Toms River by Lakewood Citizens for Fiscal Integrity, a group of residents who are not individually named, and Loigman, a former fire commissioner and lawyer known as a watchdog of local government. The township, Coles and Henshaw are defendants in the lawsuit.

Henshaw declined to comment on the lawsuit, but township officials quickly rebuffed Loigman’s claims. Coles and Lakewood Township attorney Steven Secare said Monday the lawsuit was frivolous.

“This is another frivolous attempt by Mr. Loigman to muddy waters that are absolutely clear,” Secare said. “The agreement with Mr. Henshaw was negotiated in good faith by the township and Mr. Henshaw. His resignation was amicable to both sides.”

Coles said negotiations over Henshaw’s severance were approved by Secare and the entire township committee.

“I really don’t know what he’s basing this on,” Coles said of the lawsuit.

RESIGNATION: Lakewood town manager quits suddenly after possible email dispute

SEVERANCE: Lakewood pays $327,000 severance to former administrator

Henshaw resigned abruptly in September after three years with the township. His separation agreement included a payment of $327,000, which included about $276,000 of salary through the end of this year and 2019.

The agreement says Henshaw cannot sue the township or talk to the press or others in a way that would “adversely effect” the township’s business or reputation.

Henshaw’s contract and state law say that the municipal manager must be removed by a two-thirds vote of the five-member township committee. It also called for two weeks’ notice if Henshaw chose to resign.

The lawsuit says the required removal vote never happened and Henshaw never submitted his resignation.

But Henshaw’s contract with the township says if he is removed, his salary must be paid for six months “unless other arrangements are made and agreed upon by both parties.” Lakewood Township code says if the committee voted to fire Henshaw, he’s entitled to three months of his salary as payment.

“This three-month provision shall not apply in the event the Municipal Manager voluntarily terminates employment by resigning the office or position,” the code reads. “In such event the Manager shall be paid only to the date of actual termination of duties.”

The lawsuit asks a judge to declare the separation agreement invalid and issue an order stopping any township money from going to Henshaw. The separation agreement says Henshaw will continue to be paid bi-weekly. The judge should also hold Coles personally liable for any money the township owes, the lawsuit says.

READ: Lakewood baby case: ‘It was an accident,’ caretaker says

BREAKING NEWS: Lakewood BMG student missing, cops say

Township officials and Henshaw have declined to comment on the reason for his resignation.

However, a township source, who was not authorized to speak to the media, said the resignation stemmed from a misunderstanding.

Henshaw said he thought township staff was being asked to improperly delete emails, according to the source.

Coles confirmed a recent discussion among township staff about email retention policies that occurred after the township received a records request for 10 years worth of emails, but said he did not ask anyone to delete messages.

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Lakewood, the Who, What, Where, When and Why –


Race, religion, corruption and politics: A guide to the crisis in Lakewood


LAKEWOOD — The drive into Lakewood from the Parkway could be confused with any other stretch of county road near the Pinelands. There are farm stands, strip malls, modest neighborhoods and an occasional open field.

Then, you cross the border into Lakewood and the landscape changes immediately. There are suddenly crowded townhouse developments, new multifamily houses going up and members of the Orthodox Jewish community on every sidewalk.

Lakewood represents the convergence of almost every issue in New Jersey – race, religious freedom, discrimination, corruption, local politics, school funding, overdevelopment and transportation woes.

What makes it unique is the unprecedented growth of the town combined with the complex issues surrounding the booming Orthodox Jewish community.

While tensions have been rising in Lakewood for years, the turmoil has escalated in recent weeks with a showdown over school funding and a high-profile welfare fraud investigation.

The town thrust into the spotlight this summer with the arrest of 26 members of the Orthodox community accused of lying about their income to collect more than $2 million in public assistance.

The arrests brought renewed attention to Lakewood and highlighted what residents of the Ocean County town already know – Lakewood is changing. This once-faded resort community has become the most complex town in New Jersey.


What makes Lakewood unique?

Lakewood is booming. Thanks to an influx of Orthodox Jews, it has been New Jersey’s fastest-growing town over the last 20 years. It has one of the highest birth rates in the world. Housing is going up at an unprecedented pace.

“It’s probably the most attractive place in the United States today for a young Orthodox Jewish family,” said Rabbi Aaron Kotler, one of the leaders of the Orthodox community. “That’s a phenomenon that certainly didn’t exist when I was growing up, 20 or 30 years ago. But it’s a reality today.” 

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