Arie Rangott, Head Start Program Fraud, New York 2024

Arie Rangott, a former non-profit executive, was found guilty of conspiring to defraud the federal Head Start program, to submit a false document to the federal government, and to obstruct a federal administrative proceeding. Rangott was convicted following a two-week trial before U.S. District Judge Jennifer H. Rearden and is scheduled to be sentenced on December 10, 2024.

According to the indictment, Rangott was the shadow executive director of a non-profit entity, Project Social Care Head Start Inc. (PSCHS), that operated in the New York City area. The U.S. Department of Health and Human Services (HHS) annually granted PSCHS millions of dollars that were to be overseen by an independent board of directors, to be used exclusively on the Head Start program, and from which earning a profit is prohibited by law.

Rangott and others conspired to submit numerous fictitious documents to HHS that fraudulently asserted PSCHS had an independent board of directors and had in place controls to guard against fraud, waste, and abuse. In truth, PSCHS had neither an independent board nor sufficient controls in place. Rangott and his co-conspirators used their control over PSCHS to impermissibly direct PSCHS’s Head Start funding to for-profit companies owned by co-conspirators through rampant undisclosed self-dealing.

In December 2021, HHS sent a letter to PSCHS detailing several complaints about self-dealing at PSCHS, among other things. In response, Rangott and his co-conspirators prepared and submitted a report to HHS that falsely denied the self-dealing and made other misstatements. Then, in August and September 2022, the HHS Office of the Inspector General opened an investigation into related issues at PSCHS. Rangott and his co-conspirators agreed to obstruct that investigation by lying to the investigators, coordinating stories, and submitting false documents.

Rangott, 54, of Toms River, New Jersey, was convicted of conspiracy to defraud the U.S., conspiracy to falsify documents and records, and conspiracy to obstruct an agency proceeding. Each of the three offenses carries a maximum sentence of five years in prison. Rangott faces up to 15 years in prison when he is sentenced on December 10, 2024.

Several of Rangott’s co-conspirators have pled guilty, including Martin Handler and Menachem Lieberman, each of whom secretly controlled PSCHS and directed PSCHS to steer federal funds to their own for-profit companies. Isidore Handler, who played a significant role in falsifying documents submitted to HHS, also pled guilty. All three await sentencing.