“A Monsey businessman charged in a $14 million scheme to rip off a federal program to provide computers to yeshivas was once cited as a New York City slumlord.
Peretz Klein, who ran the Bridgestone Group LLC, in 2012 and 2013 faced 144 infractions of the New York City health code for a 46-unit apartment building at 1645 Grand Ave. in the Bronx, according to the New York City Public Advocate’s Office.
The company is no longer listed on the office’s “NYC Worst Landlord Watchlist” for 2017. The company’s corporate address is Klein’s home at 44 Ellish Parkway.
Klein and six others — including his wife and nephew — were named in a federal grand jury indictment unsealed Wednesday accusing them of stealing $14 million from the federal E-Rate program.
The indictment charges the yeshivas, vendors and consultants took part in the program but in most cases, the computers and installation services were never provided to the private schools in Ramapo.
In some instances, the money went toward installing other equipment like alarm systems, though the paperwork described computer-related work.
More than two years after a series of nearly two-dozen public raids on yeshivas and computer distributors by federal and local authorities, some expected more than the seven arrests made Wednesday.
In March 2016, more than 300 FBI, Rockland District Attorney’s Office detectives and local police executed subpoenas at 22 locations in the Monsey-Spring Valley areas of Ramapo.
Michael Castelluccio, a Preserve Ramapo leader, said he expected more yeshivas and administrators to be taken down by the federal investigation.
“Yes, I did, given the number of the agents sent to various locations on the day of the raids and the reports we received back about the locations that were searched,” Castelluccio said.
Castelluccio speculated the reasoning could have been no violations were found at the schools, administrators cooperated, the schools paid restitution or the investigation is continuing. He also noted that in March 2016 aside from raids in Ramapo, the FBI took documents and other evidence from Hasidic schools and businesses in Brooklyn and Kiryas Joel in Orange County.
In this file video from March 16, 2016, FBI agents are seen taking records from a technology vendor.Rockland/Westchester Journal News
The U.S. Attorney’s Office and FBI don’t comment on investigations or issues not raised in indictments or other public documents.
Facing federal conspiracy and fraud charges were Klein, 64, his wife Susan Klein, 57, both of Monsey, their nephew Ben Klein, 39, of Monsey, Simon Goldbrener, 55, of Monsey, Moshe Schwartz, 45, of Monroe in Orange County, Sholem Steinberg, 39, of Monsey, and Aron Melber, 42, of Monsey.
Six of the seven pleaded not guilty and were released on bail following their arraignment in the U.S. Courthouse in White Plains after their arrests Wednesday. The statute sets a prison sentence of 20 years, though a judge has discretion under federal sentencing guidelines
All seven are accused of obtaining millions of dollars in E-Rate funds and defrauding the program that helps educate underprivileged children between 2010 and 2016, according to a federal indictment.
Melber was not arraigned because he was attending a daughter’s wedding.
Attorney Susan Necheles, representing Peretz Klein and wife in court, said, “It’s a case that’s been investigated for a long time and we believe nothing improper was done by the defendants and we intend to prove that in court.”
Ben Klein’s attorneys — Kenneth Gribetz and Deborah Wolikow Loewenberg — said their client is accused of certifying he installed computers and other hardware equipment, but actually did other work, like installing alarm systems.
Gribetz said Ben Klein had a minimal role in the alleged conspiracy, saying Klein did work for the money but not the work he certified he did.
“We intend on having him exonerated,” Loewenberg said Thursday. “We believe once the government sees he didn’t really do anything wrong the charges will be dismissed.”
Ben Klein is out on $500,000 bail and is wearing a monitor for a pending felony charge in Spring Valley Justice Courtof filing a false instrument. He served a nearly one-year Pennsylvania prison sentence in 2003 for vehicular homicide.”
Read the full Journal News report here.