Annie
Well-known member
- Joined
- Oct 15, 2005
- Posts
- 318
The following article describes how easy it is to corrupt the academic system.
Enjoy,
------
Nation & World : Tuesday, March 20, 2001
Close-up
Clinton scandal and a $40 million scam
By Josh Getlin
Los Angeles Times
NEW SQUARE, N.Y. - For more than four decades, this community of Hasidic residents has lived a reclusive existence far removed from the malls and subdivisions surrounding the village north of New York City. Television sets and newspapers are banned here. So are shorts, T-shirts and bathing suits.
Signs in Yiddish advise men and women to walk on different sides of the road. As mothers shepherd children through snowy streets, their fathers, husbands and sons spend hours in study halls poring over holy texts.
But this village that deliberately shut out the modern world also is the home of a sophisticated scam that bilked $40 million from the federal government to support civic and spiritual enterprises.
And ever since then-President Clinton commuted prison sentences for four men who engineered the fraud, the town that overwhelmingly backed Hillary Rodham Clinton's U.S. Senate bid has been caught up in scandal.
The U.S. attorney in New York City has launched a probe to determine whether there was a deal that swapped votes for the reduced sentences, and last week FBI agents began questioning residents.
"I'd say the mood here is one of exasperation, because nobody has offered proof that there was a deal to trade votes for pardons," said Rabbi Mayer Schiller, a town spokesman. "Nobody got rich here. The men convicted used the money to support local schools and, while they might have violated the letter of the law, they didn't think they violated the spirit of the law."
Vote for Clinton: 1,400-12
Prosecutors have angrily protested the commutations, saying they send the wrong message to groups contemplating fraud.
And many observers have challenged Hillary Clinton's contention that she had nothing to do with her husband's decision to reduce the sentences.
The New Square furor had its roots in her visit here in August, a time when her Senate campaign was in trouble with Jewish voters over her earlier embrace of a Palestinian state. She needed a show of support from the state's politically potent Orthodox Jewish community and, with great fanfare, the first lady toured the village. The highlight was an audience with Grand Rebbe David Twersky, the town's spiritual leader.
Sen. Clinton has said repeatedly that neither she nor Twersky discussed the four imprisoned men during the meeting, an account supported by several witnesses.
In November, the town voted 1,400-12 for her, unlike two neighboring Orthodox communities that voted heavily for her opponent. The Clintons invited Twersky to visit the White House on Dec. 22, when, she said, the rabbi lobbied to reduce the sentences.
What New Square is all about
A town of modest, sometimes ramshackle houses and apartments, New Square was founded in 1956 by Grand Rebbe Joseph Twersky (David Twersky's father) from Ukraine. It was the United States' first all-Orthodox Jewish village, modeled along the lines of a 19th-century Russian shtetl.
The sexes are segregated in public, and residents mingle as little as possible with American culture, which is deemed profane.
Although some people are employed, most are absorbed with trying to observe a strict Hasidic lifestyle. As a result, the 7,000-member community has traditionally sought government funding to stay alive, said J.J. Goldberg, editor of Forward, a weekly Jewish newspaper published in New York City.
More than 60 percent of residents live below the poverty line, according to federal statistics, yet the town is rich in another sense: Its leaders have historically delivered huge blocs of votes to supportive politicians, in past elections giving equally lopsided votes to New York Gov. George Pataki, a Republican, and U.S. Sen. Charles Schumer, a Democrat.
But there are limits to political largess: Although New Square's life is centered on its yeshiva, a school for Talmudic studies, there is a federal ban on aid to such religious institutions. And this was the seed of the fraud that took root in the early 1980s. Unable to get conventional funding for the yeshiva and other schools, a handful of men connected to the town's village council tapped into a gold mine of federal programs.
The scam: phantom schools
During a 1999 trial, prosecutors said hundreds of New Square residents had received thousands of dollars in federal grants to attend a fictitious school based in Brooklyn. Meanwhile, newly arrived Russian immigrants received $300 payments to sign up for nonexistent courses in local schools with teachers who didn't exist.
Similar schemes were hatched with small-business loans and rental subsidies from federal housing programs, enabling organizers to fund the yeshiva and other facilities until the fraud was halted in 1992.
Although they claimed to have simply misunderstood federal regulations, four residents were convicted of funneling federal money into the New Square yeshiva and other schools, bank accounts and, in some cases, the pockets of the organizers. U.S. District Judge Barbara Jones said the men had masterminded a scheme that was "sophisticated, long-term and brazen in its execution."
Two other New Square men were indicted, but they fled to Israel in 1997. Chaim Berger, a town political elder and alleged architect of the fraud, is fighting extradition.
In his Jan. 20 commutation, Clinton reduced the sentences of Kalman Stern, Jacob Elbaum, Benjamin Berger (Chaim's son) and David Goldstein from a maximum of 6½ years to a maximum of 2½ years. Attorneys said that the men, who remain in custody, are remorseful and that their large families are suffering.
'The feds got fed up'
The New Square case was similar to others in ultra-Orthodox Jewish communities probed by federal investigators during the early 1990s. During a 1993 U.S. Senate hearing, witnesses cited 37 instances where groups were using federal money illegally. Most cases were settled through negotiation, but New Square landed in court.
"I'll tell you why," said a prominent town figure, who asked not to be identified. "The feds got fed up, because at the initial stages of the investigation, people here were very uncooperative. The government was really annoyed at the scale of the fraud and the kind of resistance they encountered."
When FBI agents drove into town to serve subpoenas in 1995, they were surrounded by motorists who threatened them and forced them to leave. When agents returned with a police escort, they were followed by a car with a loudspeaker blaring instructions in Yiddish and urging residents not to cooperate. The next year, after a federal court had failed to get financial records from the yeshiva, a judge forced it into receivership and levied a $1 million fine.
Scam perpetrated for years
Authorities later determined that the defendants had signed up many residents for Pell education grants beginning in the early 1980s. These stipends of as much as $2,500, which do not have to be reimbursed, are designed to further a student's college education and help develop career skills.
The scam had escaped major scrutiny until auditors visiting New Square in 1992 grew suspicious. Brian Hickey, a veteran investigator with the Department of Education, triggered a wide-ranging probe after he asked to inspect financial records. He was kept waiting for hours, before finally inspecting documents that seemed to be freshly typed.
When he asked one Pell-grant recipient when she expected to graduate, she answered, "You mean from high school?"
Hickey and other auditors decided to go door to door to see whether students were taking college-level courses. They discovered widespread fraud: Abraham Berkowitz, who testified under a grant of immunity, said he and the defendants regularly posed as school administrators for the fictitious Brooklyn school and rehearsed their roles before auditors arrived.
Two women who got Pell grants for 14 and 11 years, respectively, could not recall what they studied.
One student, asked what she learned in biology, said she had been trained to prepare kosher meat. Another woman, told her husband had been enrolled in rabbinical courses for six years, testified that he actually was a limousine driver from Teaneck, N.J. "If he'd taken all of these classes," she said angrily, "he'd have been a rabbi by now."
Enjoy,
------
Nation & World : Tuesday, March 20, 2001
Close-up
Clinton scandal and a $40 million scam
By Josh Getlin
Los Angeles Times
NEW SQUARE, N.Y. - For more than four decades, this community of Hasidic residents has lived a reclusive existence far removed from the malls and subdivisions surrounding the village north of New York City. Television sets and newspapers are banned here. So are shorts, T-shirts and bathing suits.
Signs in Yiddish advise men and women to walk on different sides of the road. As mothers shepherd children through snowy streets, their fathers, husbands and sons spend hours in study halls poring over holy texts.
But this village that deliberately shut out the modern world also is the home of a sophisticated scam that bilked $40 million from the federal government to support civic and spiritual enterprises.
And ever since then-President Clinton commuted prison sentences for four men who engineered the fraud, the town that overwhelmingly backed Hillary Rodham Clinton's U.S. Senate bid has been caught up in scandal.
The U.S. attorney in New York City has launched a probe to determine whether there was a deal that swapped votes for the reduced sentences, and last week FBI agents began questioning residents.
"I'd say the mood here is one of exasperation, because nobody has offered proof that there was a deal to trade votes for pardons," said Rabbi Mayer Schiller, a town spokesman. "Nobody got rich here. The men convicted used the money to support local schools and, while they might have violated the letter of the law, they didn't think they violated the spirit of the law."
Vote for Clinton: 1,400-12
Prosecutors have angrily protested the commutations, saying they send the wrong message to groups contemplating fraud.
And many observers have challenged Hillary Clinton's contention that she had nothing to do with her husband's decision to reduce the sentences.
The New Square furor had its roots in her visit here in August, a time when her Senate campaign was in trouble with Jewish voters over her earlier embrace of a Palestinian state. She needed a show of support from the state's politically potent Orthodox Jewish community and, with great fanfare, the first lady toured the village. The highlight was an audience with Grand Rebbe David Twersky, the town's spiritual leader.
Sen. Clinton has said repeatedly that neither she nor Twersky discussed the four imprisoned men during the meeting, an account supported by several witnesses.
In November, the town voted 1,400-12 for her, unlike two neighboring Orthodox communities that voted heavily for her opponent. The Clintons invited Twersky to visit the White House on Dec. 22, when, she said, the rabbi lobbied to reduce the sentences.
What New Square is all about
A town of modest, sometimes ramshackle houses and apartments, New Square was founded in 1956 by Grand Rebbe Joseph Twersky (David Twersky's father) from Ukraine. It was the United States' first all-Orthodox Jewish village, modeled along the lines of a 19th-century Russian shtetl.
The sexes are segregated in public, and residents mingle as little as possible with American culture, which is deemed profane.
Although some people are employed, most are absorbed with trying to observe a strict Hasidic lifestyle. As a result, the 7,000-member community has traditionally sought government funding to stay alive, said J.J. Goldberg, editor of Forward, a weekly Jewish newspaper published in New York City.
More than 60 percent of residents live below the poverty line, according to federal statistics, yet the town is rich in another sense: Its leaders have historically delivered huge blocs of votes to supportive politicians, in past elections giving equally lopsided votes to New York Gov. George Pataki, a Republican, and U.S. Sen. Charles Schumer, a Democrat.
But there are limits to political largess: Although New Square's life is centered on its yeshiva, a school for Talmudic studies, there is a federal ban on aid to such religious institutions. And this was the seed of the fraud that took root in the early 1980s. Unable to get conventional funding for the yeshiva and other schools, a handful of men connected to the town's village council tapped into a gold mine of federal programs.
The scam: phantom schools
During a 1999 trial, prosecutors said hundreds of New Square residents had received thousands of dollars in federal grants to attend a fictitious school based in Brooklyn. Meanwhile, newly arrived Russian immigrants received $300 payments to sign up for nonexistent courses in local schools with teachers who didn't exist.
Similar schemes were hatched with small-business loans and rental subsidies from federal housing programs, enabling organizers to fund the yeshiva and other facilities until the fraud was halted in 1992.
Although they claimed to have simply misunderstood federal regulations, four residents were convicted of funneling federal money into the New Square yeshiva and other schools, bank accounts and, in some cases, the pockets of the organizers. U.S. District Judge Barbara Jones said the men had masterminded a scheme that was "sophisticated, long-term and brazen in its execution."
Two other New Square men were indicted, but they fled to Israel in 1997. Chaim Berger, a town political elder and alleged architect of the fraud, is fighting extradition.
In his Jan. 20 commutation, Clinton reduced the sentences of Kalman Stern, Jacob Elbaum, Benjamin Berger (Chaim's son) and David Goldstein from a maximum of 6½ years to a maximum of 2½ years. Attorneys said that the men, who remain in custody, are remorseful and that their large families are suffering.
'The feds got fed up'
The New Square case was similar to others in ultra-Orthodox Jewish communities probed by federal investigators during the early 1990s. During a 1993 U.S. Senate hearing, witnesses cited 37 instances where groups were using federal money illegally. Most cases were settled through negotiation, but New Square landed in court.
"I'll tell you why," said a prominent town figure, who asked not to be identified. "The feds got fed up, because at the initial stages of the investigation, people here were very uncooperative. The government was really annoyed at the scale of the fraud and the kind of resistance they encountered."
When FBI agents drove into town to serve subpoenas in 1995, they were surrounded by motorists who threatened them and forced them to leave. When agents returned with a police escort, they were followed by a car with a loudspeaker blaring instructions in Yiddish and urging residents not to cooperate. The next year, after a federal court had failed to get financial records from the yeshiva, a judge forced it into receivership and levied a $1 million fine.
Scam perpetrated for years
Authorities later determined that the defendants had signed up many residents for Pell education grants beginning in the early 1980s. These stipends of as much as $2,500, which do not have to be reimbursed, are designed to further a student's college education and help develop career skills.
The scam had escaped major scrutiny until auditors visiting New Square in 1992 grew suspicious. Brian Hickey, a veteran investigator with the Department of Education, triggered a wide-ranging probe after he asked to inspect financial records. He was kept waiting for hours, before finally inspecting documents that seemed to be freshly typed.
When he asked one Pell-grant recipient when she expected to graduate, she answered, "You mean from high school?"
Hickey and other auditors decided to go door to door to see whether students were taking college-level courses. They discovered widespread fraud: Abraham Berkowitz, who testified under a grant of immunity, said he and the defendants regularly posed as school administrators for the fictitious Brooklyn school and rehearsed their roles before auditors arrived.
Two women who got Pell grants for 14 and 11 years, respectively, could not recall what they studied.
One student, asked what she learned in biology, said she had been trained to prepare kosher meat. Another woman, told her husband had been enrolled in rabbinical courses for six years, testified that he actually was a limousine driver from Teaneck, N.J. "If he'd taken all of these classes," she said angrily, "he'd have been a rabbi by now."
