Rockland ringleader of multi-million dollar computer scam gets 4 years, $1.14M penalty

Peretz Klein, owner of Hashomer Alarm, Inc. is seen leaving his office at 29 Robert Pitt Drive in Spring Valley, cloaked under his jacket as federal agents collect evidence Wednesday, March 16, 2016. John Meore/ The Journal News

“A Spring Valley man has been sentenced to four years in federal prison and must repay $1.14 million for stealing millions of dollars from a federal program designed to provide computer technology to underprivileged school children.

Peretz Klein was considered the ringleader of the scheme involving his wife and five other Ramapo residents, who conspired to rip off the federal E-Rate program, which supplied provided billions of federal dollars to install computers and modern technology in needy schools.   Klein, his wife Susan, their son Ben, and Sholem Steinberg, of Monsey, acted as vendors, federal prosecutors said, requesting more than $35 million in E-Rate funds and received more than $14 million from about 2010 to 2016, prosecutors said.

E-rate scam: Ramapo residents who stole millions from school tech program face prison recommendation

Sentencing memorandum: Federal prosecutors outline the crimes and recommend sentences.

Ramapo: FBI, Rockland DA make 7 arrests in $14M computer fraud scam

Judge Kenneth Karas sentenced Susan Klein to time served, one year of supervised release, and ordered her responsible with her husband to pay $1.14 million in restitution, according to documents filed with the U.S. District Court in White Plains.

Peretz Klein, sentenced earlier this month, must report to Otisville Correctional Facility on Aug. 8 and will be supervised for two years after finishing his prison stint, according to documents.

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.”

The sentencings of the others involved in the scam are pending. According to a sentencing memorandum filed by the U.S. Attorney’s Office for the Southern District with Karas, prosecutors recommended the following sentences:

  • Simon Goldbrener  — 37 months with a fine of $10,000 to $100,000 and one to three years of supervised release.
  • Moshe Schwartz — three years with a fine of $10,000 to $100,000 and one to three years of supervised release.
  • Ben Klein — 2. 25 to 2.75 years with a fine of $10,000 to $100,000 and one to three years of supervised release.
  • Ari Melber — 1.5 to 2 years with a fine of $7,500 to $75,000 and one to three years of supervised release.
  • Steinberg — two to three years with a fine of $10,000 to $100,000 and one to three years of supervised release.

Goldbrener and Schwartz passed themselves off as consultants who worked for educational institutions, supposedly helping schools participate in the E-Rate program, according to federal prosecutors in their sentencing memorandum. They admitted in court that they were paid hundreds of thousands of dollars by Peretz Klein and other vendors to complete and file false E-Rate documents that circumvented the bidding process and resulted in the payment of millions of dollars to the vendors.

Melber worked for a private religious school in Rockland that participated in the E-Rate program. Melber admitted he filed false certifications claiming to have obtained authorized E-Rate-funded equipment and services from vendors selected through a fair and open bidding process.”

Read the complete Journal News coverage here.