Rabbi Who Pleaded Guilty to Stealing $5 Million of Funds Intended for Special Needs Students Sentenced to Up to Three Years in Prison
Defendant Diverted Education Funds For Own Purposes; Repaid Millions in Restitution Before Sentencing
Queens District Attorney Richard A. Brown, joined by New York State Comptroller Thomas P. DiNapoli, recently announced that Rabbi Samuel Hiller, the former assistant director of Island Child Development Center, once one of the City's largest providers of special education services to preschoolers with disabilities, has been sentenced to up to three years in prison for stealing $5 million in City and State funding between 2005 and 2012 – money that was intended for special needs students between ages three and five.
Island Child Development Center (ICDC), a private not-for-profit company that is now defunct, was located at 1854 Cornaga Avenue in Far Rockaway, Queens, and primarily provided services to preschool children in the Orthodox Jewish communities of Far Rockaway in Queens, Williamsburg and Borough Park in Brooklyn.
District Attorney Brown said, "The betrayal of the public trust by this defendant who stole funds which were earmarked for special needs pre-schoolers with disabilities and used for his personal gain was deplorable. The sentence imposed today by the Court sends a strong message that people who are engaged in fraudulent activities will be brought to justice and held accountable for their actions."
Comptroller Thomas P. Dinapoli, said, "Pocketing millions of dollars in money intended to aid children with special needs is inexcusable. Thanks to the work of my investigators and auditors in partnership with Queens County District Attorney Brown, this offender has been brought to justice and millions recovered."
The District Attorney identified the defendant as Rabbi Samuel Hiller, 59, of Far Rockaway, Queens. Hiller, who pleaded guilty to first-degree grand larceny in April, was sentenced yesterday before Queens Supreme Court Justice Joseph Zayas to one to three years in state prison. Additionally, as part of his plea agreement, Hiller made restitution of $1 million, forfeited over $1 million in seized assets, signed a confession of judgment for over $3 million to the Department of Education, and made a full and truthful completion of a "Statement of Financial Condition."
Hiller and his three co-defendant - Ira Kurman, 54, of Hewlett, Roy Hoffmann, 53, of Woodmere, and Daniel Laniado, 44, of Brooklyn - have pleaded guilty to various charges for their involvement in the theft which took place between 2005 and 2012 where they illegally diverted more than $12 million of the $27 million ICDC received in state funding to their relatives, their for-profit businesses and for personal expenses including jewelry, a family wedding and home renovations.
Defendant Kurman, the former Executive Director of ICDC and defendant Hoffman, an independent auditor hired by ICDC, both pleaded guilty last September to first-degree and second-degree grand larceny, respectively, and are awaiting sentencing in December. Defendant Laniado, an "investor" in ICDC, pleaded guilty to first-degree identity theft in April and as part of his plea agreement made restitution of $82,000 to the NYC DOE, signed a confession of judgment of over $1 million and forfeited nearly $8,000.
District Attorney Brown pointed out that New York State's Education Law requires that the State Education Department meet the physical and educational needs of children with disabilities. Additionally, within the City of New York, the Department of Education contracts with private service providers to deliver services for those who require them, including Special Education Itinerant Teachers (SEIT) who provide education services in children's homes and other venues.
The investigation was conducted by the District Attorney's Detective Bureau and his Economic Crimes Bureau. The case was additionally investigated by Comptroller DiNapoli's Division of State Government Accountability and Division of Investigations.
The District Attorney thanked the New York City Department of Education (DOE) and the DOE Deputy and Assistant Auditors General for their assistance in the investigation.
Assistant District Attorneys Eleonora B. Rivkin and Charissa Ilardi, of the District Attorney's Economic Crimes Bureau, prosecuted the case under the supervision of Assistant District Attorneys Gregory C. Pavlides, Bureau Chief, and Kristen A. Kane and Christina Hanophy, Deputy Bureau Chiefs, and under the overall supervision of Executive Assistant District Attorney for Investigations Peter A. Crusco.
To date, DiNapoli's audits and investigations have led to over 150 arrests and the ordered restitutions of over $50 million in public funds. Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at firstname.lastname@example.org, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236. Review prior cases at http://www.osc.state.ny.us/investigations/index.htm.