Score:   1
Docket Number:   SD-NY  7:18-cr-00614
Case Name:   USA v. Goldbrener et al.
  Press Releases:
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney, Assistant Director in Charge, Federal Bureau of Investigation (the “FBI”), David L. Hunt, Inspector General of the Federal Communications Commission (the “FCC-OIG”), and Thomas P. Zugibe, the District Attorney for Rockland County, announced today the return of an Indictment charging SIMON GOLDBRENER, a/k/a “Simon Goldbrenner,” a/k/a “Shimon Goldbrenner,” PERETZ KLEIN, SUSAN KLEIN, a/k/a “Suri Klein,” BEN KLEIN, a/k/a “Benzion Klein,” a/k/a “Benzi Klein,” MOSHE SCHWARTZ, SHOLEM STEINBERG, and ARON MELBER, a/k/a “Aharon Melber,” with conspiracy to commit wire fraud and wire fraud charges in connection with the federal program known as “E‑rate,” which provides subsidies for affordable telecommunications equipment and related services to qualified schools This case has been assigned to United States District Judge Kenneth M. Karas.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, for years, these defendants stole money from the E‑rate program, billing the E-rate program for equipment and services which were not in fact provided. The defendants allegedly fraudulently obtained millions of dollars in E rate funds to which they were not entitled, and which should lawfully have been spent to help provide access to technology to educate underprivileged children. This indictment is important not only because fraudsters should be held to account for their crimes, but also because the next generation of students should have access to telecommunication services, internet access, and related equipment, irrespective of their means and in spite of the fact that people like the defendants seek to line their own pockets at the expense of underprivileged children.”

FBI Assistant Director in Charge William F. Sweeney said:  “Schools have to fight for every dollar these days to supply their students with the high-tech, expensive equipment and technology they need in this day and age to succeed in life. The suspects in this investigation allegedly used funding from a program designed to give underprivileged schools internet access to pad their own bank accounts.  To add insult to injury, school officials, who see the day-to-day struggle to even find money for pencils and paper, were allegedly involved in the scheme.  The FBI and our law enforcement partners will hold these criminals accountable, and stop others from defrauding not only the government and tax payers, but students who depend on these programs to get a better education.”

Rockland County District Attorney Thomas P. Zugibe said:  “These individuals concocted a scheme that not only defrauded taxpayers, but also deprived local students of access to affordable technology equipment and Internet service. In short, the defendants are accused of shamelessly stealing millions of federal dollars earmarked to broaden young minds. The Rockland County District Attorney's Office will continue to work collaboratively with the U.S. Attorney and FBI to root out fraud and abuse - especially misconduct that impacts children. Offenders must be dealt with swiftly to prevent further fraud of this magnitude from occurring.”

According to the allegations made in the Indictment[1]:

The E‑rate distributes funds to schools and libraries mostly serving economically disadvantaged children, so that those institutions can afford needed telecommunication services, internet access, and related equipment. Over 30,000 applications from schools and libraries seeking funds to serve economically disadvantaged children were received each year during the relevant time period; every year, requests for E‑rate funds have exceeded funds available. In order to obtain those funds, educational institutions certify that they are purchasing equipment and services from a private vendor; if approved, the program defrays the cost by up to 90%. The educational institution is supposed to enter into an open bidding process in order to select a vendor, and the educational institution and vendor submit a series of certifications that they comply with a number of requirements of the E‑rate program. A school applying for E‑rate funds may employ a consultant, but that consultant must be independent of the vendors competing to sell E‑rate funded equipment and services.

PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, and SHOLEM STEINBERG (collectively, the “Vendor Defendants”) held themselves out as vendors to schools participating in the E‑rate program. Corporations controlled by the Vendor Defendants requested over $35 million in E‑rate funds, and received over $14 million in E‑rate funds, from in or about 2010 to in or about 2016.

SIMON GOLDBRENER and MOSHE SCHWARTZ (collectively, the “Consultant Defendants”) held themselves out as consultants who assisted educational institutions that desired to participate in the E rate program. The Consultant Defendants, and individuals acting at their direction, completed and filed E‑rate documents that resulted in the payment of millions of dollars in E‑rate funds to the Vendor Defendants.

ARON MELBER is an official at a private religious school in Rockland County, New York. MELBER and his school have participated in the E‑rate program with certain of the Vendor Defendants and Consultant Defendants, and filed certifications purporting to have obtained authorized E‑rate funded equipment and services from Vendor Defendants selected through a fair and open bidding process. From in or about 2009 through in or about 2015, MELBER’s school received over one million dollars in E‑rate funds.

From at least 2009 up to and including 2016, certain private religious schools, including MELBER’s school, sought and received E‑rate funds for the purpose of paying the Vendor Defendants for equipment and services that the schools, the Vendor Defendants, and the Consultant Defendants falsely claimed the Vendor Defendants had provided to the schools.

However, the schools never received millions of dollars’ worth of these items and services. In other cases, the schools, Vendor Defendants, and Consultant 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, one day care center that served toddlers from the ages of 2 through 4 requested over $700,000—nearly $500,000 of which was ultimately funded—for equipment and services—including video conferencing and distance learning, a “media master system,” sophisticated telecommunications systems supporting at least 23 lines, and high-speed internet—from companies controlled by PERETZ KLEIN and SUSAN KLEIN, using the Consultant Defendants as their consultants. In still other instances the schools received equipment and services that fulfilled the functions for which the schools had requested E‑rate funds (such as providing the school with internet access), but the schools, Vendor Defendants, and Consultant Defendants materially overbilled the E‑rate program for the items provided, in order to enrich themselves at the expense of the underprivileged children the program was designed to serve.

As alleged, the defendants also perverted the fair and open bidding process required by the E‑rate program. The Consultant Defendants—who held themselves out in filings as independent consultants working for the schools, but, in truth, worked with and for the Vendor Defendants—and the Vendor Defendants presented the schools with forms to sign or certify, awarding E‑rate funded contracts to the Vendor Defendants. As a result of false and misleading E‑rate filings, the Vendor Defendants received millions of dollars in E‑rate funds for equipment and services that the Vendor Defendants did not in fact provide and which the schools did not use, and the Consultant Defendants accepted payments totaling hundreds of thousands of dollars from the Vendor Defendants, despite falsely presenting themselves as independent of the Vendor Defendants.

In return for their participation in the scheme to defraud the E‑rate program, certain schools and school officials received a variety of improper benefits from the Vendor Defendants, including: a percentage of the funds fraudulently obtained from E‑rate for equipment and services that were not in fact provided to the schools; free items paid for with E‑rate funds but not authorized by the program, such as cellphones for school employees’ personal use and alarm systems and security equipment (which the E‑rate program does not authorize) installed at the schools; and free services for which the E‑rate program authorizes partial reimbursement (such as internet access) but for which the Schools did not—contrary to their statements in filings—make any payment at all.

The defendants and the counts with which they are charged in the Superseding Indictment are set forth in the attached list.

* * *

Mr. Berman thanked the FBI, the FCC-OIG, and the Rockland County District Attorney’s Office for their outstanding work on the investigation. This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael D. Maimin, Hagan Scotten, and Vladislav Vainberg are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

18-296                                                                                                                                                                                                             ###

United States v. Simon Goldbrener, et al.

 



Defendant





Age





Residence





Charges and Maximum Penalties





Simon Goldbrener





55





Monsey, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (three counts): 20 years in prison per count





Peretz Klein





64





Spring Valley, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison





Susan Klein





57





Spring Valley, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison





Ben Klein





39





Monsey, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison





Moshe Schwartz





45





Monroe, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison





Sholem Steinberg





39





Monsey, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (two counts): 20 years in prison per count





Aron Melber





42





Monsey, New York





Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison

Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison



 

 



[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.





Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1h4p15Vron6BqdIOtZRgw9wHD31KTzrLIC_wPhzEl7EQ/edit#gid=0
  Last Updated: 2020-09-18 13:42:19 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE2
Format: N2

Description: The four digit AO offense code associated with FTITLE2
Format: A4

Description: The four digit D2 offense code associated with FTITLE2
Format: A4

Description: A code indicating the severity associated with FTITLE2
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
F U C K I N G P E D O S R E E E E E E E E E E E E E E E E E E E E