Wednesday, June 28, 2017
14 arrested in New Jersey welfare fraud investigation
Nearly 15 people have been arrested in raids over two days in a New Jersey community in connection with an ongoing investigation that has so far exposed about $2 million in alleged public-assistance fraud in the town.
Six people were arrested Tuesday night in Lakewood, N.J., a community of about 101,000, nearly 38 miles southeast of Trenton, the state capital. The arrests follow the federal and state raids of four homes and arrests of eight people Monday on charges of stealing $1.3 million in public assistance over the last few years.
Lakewood is the fastest-growing town in New Jersey and surpassed 100,000 residents earlier this year, according to the Census Bureau. In the town, 32% of people live in poverty, Census figures show. Lakewood's rapid population growth is fueled by a flourishing Orthodox Jewish community.
Each of the six people arrested Tuesday is facing a charge of second-degree theft by deception, a state crime, according to a prepared statement from the Ocean County Prosecutor's Office.
The six people are accused of defrauding the government of just more than $670,000, according to the prosecutor's office.
Arrested Tuesday were: Yitzchok and Sora Kanarek; Chaim and Liatt Ehrman; and William and Faigy Friedman.
The Kanareks wrongfully collected $339,002.56 in Medicaid, nutrition assistance, Social Security and federal housing funds, according to the prosecutor's office. The Ehrmans brought in $185,692.22 in improper Medicaid, nutrition assistance, utilities assistance and Sandy relief funds and the Friedmans bilked $149,842.28 in Medicaid, food, energy and housing funds, according to the prosecutor's office.
Yitzchok Kanarek is the former rabbi of Oros Yisroel, a school for special-needs students that closed in 2015 because of federal and state tax liens of more than $295,000, according to public records.
The six people arrested Tuesday are accused of under-reporting their incomes over a period of several years to collect public-assistance benefits they weren't entitled to receive.
Authorities "allege that the defendants misrepresented their income, declaring amounts that were low enough to receive the program's benefits, when in fact their income was too high to qualify," according to a joint statement from Ocean County (N.J.) Prosecutor Joe Coronato and New Jersey Comptroller Phillip James Degnan. The families "received income from numerous sources that they failed to disclose on required program applications."
On Monday, a prominent rabbi, Zalmen Sorotzkin, who runs the synagogue Congregation Lutzk and businesses linked to the synagogue, was arrested. The others arrested Monday included, Sorotzkin's wife, Tzipporah; his brother and sister-in-law Mordechai and Rachel Sorotzkin; Mordechai and Jocheved Breskin; and Shimon and Yocheved Nussbaum. Mordechai and Rachel Sorotzkin and the Nussbaums face federal charges in U.S. District Court.
"Financial assistance programs are designed to alleviate family hardships for those truly in need," Coronato said in a statement Monday. "My office gave clear guidance and notice to the Lakewood community in 2015 of what is considered financial abuse of these programs.
"Those who choose to ignore those warnings by seeking to illegally profit on the backs of taxpayers will pay the punitive price of their actions."
Duvi Honig, the CEO of the Lakewood-based Orthodox Jewish Chamber of Commerce, said that thousands of Jewish families in the town need the public assistance to get by and that some people are tempted to take more than they need.
"The pressure of the community overhead — especially the (cost of) private schooling — is unsustainable," he said about the Jewish community. "People are forced to find ways to bend the system."
The Breskins are charged with second-degree theft by deception for allegedly collecting $585,662 in public assistance benefits they weren't entitled to, the prosecutor said in the statement.
Zalmen and Tzipporah Sorotzkin face the same charges for allegedly collecting $338,642 in Medicaid, food stamps, Section 8 housing subsidies and Supplemental Security Income, according to the prosecutor's office.
Edward Bertucio, attorney for Zalmen and Tzipporah Sorotzkin said his clients were "innocent" but declined to comment specifically on the case.
The Nussbaums allegedly under-reported their incomes and failed to disclose money they received from a number of companies in order to collect Medicaid, Section 8 housing assistance and food stamps between 2011 and 2014, according to a federal complaint signed by FBI Special Agent Michael Farina.
In that time, the Nussbaums allegedly collected $178,762 in public assistance they weren't entitled to get.
The complaint against Mordechai and Rachel Sorotzkin accuses them of also under-reporting their incomes to collect Medicaid. Rachel Sorotzkin allegedly failed to report $1.5 million she received from a limited liability company when signing up for public assistance.
In the complaint, Farina wrote that Mordechai and Rachel Sorotzkin received more than $96,000 in Medicaid funds they shouldn't have claimed.
The Nussbaums and Mordechai and Rachel Sorotzkin face separate counts of conspiring to steal government funds, according to a statement from the U.S. Attorney's office. The conspiracy counts each carry a maximum potential penalty of up to five years in prison and a $250,000 fine, or twice the gain from the offense.
Fred Zemel, the attorney for Rachel Sorotzkin, said "everything's going to work out" and all the defendants "will be vindicated."
The investigation into the alleged public-assistance fraud began around three years ago and now comprises a variety of federal and state law enforcement agencies. The FBI, the Social Security Administration, the New Jersey Treasury Department, the state comptroller's Medicaid Fraud Division and the Ocean County Prosecutor's Office all have been investigating.
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