“Federal prosecutors are urging a judge to sentence six Ramapo residents to prison for their involvement in stealing millions of dollars from a federal program designed to provide computer technology to underprivileged students.
Peretz Klein and his wife, Susan Klein, both of Spring Valley; and Monsey residents Simon Goldbrenner, Moshe Schwartz, Ben Klein, Sholem Steinberg and Aron Melber all entered guilty pleas to conspiracy charges in February.
Sentencing had been delayed from June due to the coronavirus pandemic and is expected in mid-January, according to a memorandum submitted by the U.S. Attorney’s Office in Manhattan. A hearing is likely after defense attorneys file their sentencing memorandums with the court.
According to the memorandum filed with U.S. District Court Judge Kenneth Karas, prosecutors recommended the following:
- Peretz Klein, the conspiracy’s de facto leader — 5 years with a fine ranging from $25,000 to $250,000 and one to three years of supervised release.
- Susan Klein — one to three years probation with a fine of $7,500 to $75,000.
- Goldbrener — 37 months with a fine of $10,000 to $100,000 and one to three years supervised release.
- Schwartz — 3 years with a fine of $10,000 to $100,000 and one to three years supervised release.
- Ben Klein — 2. 25 to 2.75 years with a fine of $10,000 to $100,000 and one to three years supervised release.
- Steinberg — 2 to 3 years with a fine of $10,000 to $100,000 and one to three years supervised release.
- Melber — 1.5 to 2 years with a fine of $7,500 to $75,000 and one to three years supervised release.
Karas determines the sentences.
Prosecutors, in recommending prison for six of the seven, said, “In a purely technical sense, they defrauded a government program called ‘E-Rate.’ But what they really did was steal from underprivileged schoolchildren.”
The E-Rate program helps provide telecommunications services and equipment to schools serving needy students. The program never has sufficient funds to aid every eligible school.
The prosecutors said the seven people convicted “figured out how to game the program, submitting fraudulent invoices in order to get paid for equipment they did not provide, among many other deceptions.
“They robbed students of technology needed to prepare for a digital world in order to enrich themselves and their families,” the prosecutors wrote. “And, when they lied to steal that money, they broke the law.”
The memorandum stated Peretz Klein ran a web of shell companies and supervised more than a dozen employees carrying out the fraud, which he repeated for years.
He profited far more than any other defendant and paid others, such as Moshe Schwartz and Simon Goldbrener, hundreds of thousands of dollars to further his scheme, according to prosecutors.
“He did all this so that he and his family could enjoy a comfortable lifestyle by depriving underprivileged schoolchildren of the technology they needed to prepare for the information age,” the memorandum states.
FBI action nearly five years ago
The investigation burst into public view in March 2016 when hundreds of FBI agents, Rockland District Attorney’s Office detectives, and local police descended on ultra-Orthodox private schools and companies, seizing payment records, equipment and other documents.
The FBI-led raids were part of an investigation into whether local yeshivas properly spent money obtained through the E-Rate program, overseen by the Universal Service Administration Co. for the Federal Communications Commission. The program came into existence in 1998 and now allocates more than $4 billion annually for computer and internet access across the nation.
Read the complete LoHud coverage here.