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Peretz Klein and Susan Klein, both of Spring Valley; and Simon Goldbrenner, Moshe Schwartz, Ben Klein, Sholem Steinberg, and Aron Melber, all of Monsey, pleaded guilty in White Plains Federal Court to one count of conspiracy to commit wire fraud on Wednesday, Feb. 12, said U.S Attorney for the Southern District of New York Geoffrey S. Berman.
“Each of these defendants has now admitted his or her role in a massive scheme that stole millions of dollars from the E-Rate program," Berman said. "That money should have been spent to help educate underprivileged children. Instead, it went to line the defendants’ pockets. Now they will answer for their crimes.”
The schools at issue never received millions of dollars’ worth of computer items and services for which the defendants billed the E-Rate program, the U.S. Attorney's Office said.
In other cases, the schools and the defendants requested hundreds of thousands of dollars of sophisticated technology that served no real purpose for the student population.
For example, from 2009 through 2015, a daycare center for toddlers requested over $700,000 – nearly $500,000 of which was ultimately funded – for equipment such as video conferencing and distance learning, items children in that age group would never use.
In all, the corporations they controlled requested more than $35 million in E-rate funds, of which they received more than $14 million from 2010 to 2016.
All seven face a statutory maximum sentence of five years in prison, will be required to pay restitution and could be fined as much as $250,000 fine.
They are scheduled to be sentenced in May and June.
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