Monday, June 26, 2017
Federal and local authorities are releasing more details on the arrests of four couples, including a prominent rabbi, in Lakewood Monday morning on charges of failing to report "sizable incomes" so they could allegedly fraudulently collect more than $1.3 million in public assistance benefits.
Rachel Sorotzkin, 32; Mordechai Sorotzkin, 35; Yocheved Nussbaum, 40, and Shimon Nussbaum, 42, are each charged with one count of conspiring to steal government funds, Acting U.S. Attorney William E. Fitzpatrick said.
Meanwhile, Mordechai Breskin, 37, and Jocheved Breskin, 35, and Zalmen Sorotzkin, 39, and Tzipporah Sorotzkin, 35, were taken to Superior Court in Ocean County to face charges of defrauding state programs, Ocean County Prosecutor Joseph D. Coronato and State Comptroller Philip James Degnan said.
The arrests are the first in what are expected to be multiple ongoing arrests in Lakewood, the Ocean County prosecutor's office said. Additional charges, including tax charges, are possible as well, the prosecutor's office said.
Zalmen Sorotkin and his wife and the Breskins were charged in state court because the fraud involved primarily state programs, the prosecutor's office said, while Mordechai Sorotzkin and his wife and the Nussbaums were charged in federal court because the programs they are accused of defrauding are federal ones, prosecutors said.
Mordechai and Jocheved Breskin of Blue Jay Way are charged with second-degree theft by deception, the prosecutor's office said. They are accused of fraudulently collecting at least $585,662 in benefits from Medicaid, the Supplemental Nutrition Assistance Program, Section 8 rental assistance and Supplemental Social Security Insurance benefits from January 2009 through December 2014, Coronato's office said.
Zalmen and Tzipporah Sorotzkin of Olive Court also are charged with second-degree theft by deception, accused of fraudulently collecting at least $338,642 in Medicaid, SNAP, HUD and SSI benefits between January 2009 and April 2014, Coronato's office said.
Zalmen Sorotzkin is a rabbi who runs the Bais Medrash Lutzk synagogue on New Egypt Road in Lakewood, according to the Asbury Park Press.
The rabbi, his wife and the Breskins were ordered released by a Superior Court Judge Steven Nameth after the preliminary hearing, according to NJ.com. Rachel and Mordechai Sorotzkin and the Nussbaums were making their appearances Monday afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court, Fitzpatrick's office said.
“Financial assistance programs are designed to alleviate family hardships for those truly in need," Coronato said. "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.”
The FBI complaints against Rachel and Mordechai Sorotzkin accuse them of applying for and receiving Medicaid health insurance benefits for themselves and their children but failing to report significant financial windfalls that affected their income, "including a lump sum payment of $1 million from Rachel Sorotzkin’s business in April of 2013," federal prosecutors said. They first were approved for Medicaid benefits in August 2011, and continued to use them despite earning in excess of $1 million in 2012 and in 2013, defrauding the government of approximately $96,000 in taxpayer-funded medical care, authorities said.
In a separate scheme, federal authorities allege, Yocheved and Shimon Nussbaum applied for and received public benefits for themselves and their children from 2011 through 2014, despite their significant income. The Nussbaums created a variety of companies that were nominally run by relatives but were actually controlled by the Nussbaums, authorities said, and they opened various bank accounts in the names of these companies and used funds from these accounts to cover personal expenses.
The Nussbaums' companies included a clothing business in Yocheved Nussbaum's name that generated income used in part for a $100,000 purchase of a piece of property for a real estate business also in their names; a day care business, and a nonprofit autism association.
The autism association's business accounts were used to pay $10,000 in attorney's fees for the Nussbaums in a civil litigation matter, the federal complaint said.
Authorities allege that in applying for Medicaid, Section 8 housing, and SNAP food benefits, the Nussbaums grossly underreported their true income by failing to include the income from these business accounts. Despite annual income of up to as high as approximately $1.8 million in 2013, the Nussbaums continued to receive taxpayer-funded health, housing and food benefits through August 2014, ultimately defrauding the government of approximately $178,000, authorities allege.
The conspiracy counts each carry a maximum potential penalty of up to five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, authorities said.
The investigations initiated by the Federal Bureau of Investigation’s Red Bank office and the New Jersey Office of the State Comptroller's Medicaid Fraud Division were expanded to include the U.S. Social Security Administration, the New Jersey Department of the Treasury's Office of Criminal Investigation, and the Ocean County Prosecutor’s Office's Economic Crimes Unit.
Fitzpatrick in his news release credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Ocean County Prosecutor’s Office, under the direction of Ocean County Prosecutor Joseph D. Coronato; the New Jersey Office of the State Comptroller, under the direction of State Comptroller Philip James Degnan; the New Jersey Department of the Treasury – Office of Criminal Investigation; under the direction of Special Agent in Charge Charles Giblin; Social Security Administration – Office of the Inspector General, under the direction of Special Agent in Charge John Grasso; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
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