Defendants, Vendors, and Consultants Indicted for Defrauding Federal ‘E Rate’ Subsidy Program
By Grimy Times Staff
A wide-ranging scheme to defraud the federal ‘E Rate’ subsidy program has been uncovered, with several individuals, including vendors and consultants, charged with conspiracy to commit wire fraud and wire fraud. The indictment, returned in the United States District Court for the Southern District of New York, alleges that the defendants stole millions of dollars in E-rate funds to which they were not entitled.
The E-rate program provides subsidies for affordable telecommunications equipment and related services to qualified schools, with over 30,000 applications from schools and libraries seeking funds each year. The program defrays the cost of equipment and services by up to 90% for approved applications. However, the indictment alleges that the defendants fraudulently obtained millions of dollars in E-rate funds by billing the program for equipment and services that were not provided.
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."
FBI Assistant Director in Charge William F. Sweeney added, "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."
The Rockland County District Attorney’s Office also released a statement, saying, "These individuals concocted a scheme that not only defrauded taxpayers, but also deprived local students of access to affordable technology equipment and Internet service."
The indictment charges SIMON GOLDBRENER, PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, MOSHE SCHWARTZ, SHOLEM STEINBERG, and ARON MELBER with conspiracy to commit wire fraud and wire fraud charges. The case has been assigned to United States District Judge Kenneth M. Karas.
The indictment alleges that the defendants stole millions of dollars in E-rate funds by billing the program for equipment and services that were not provided. The E-rate program provides subsidies for affordable telecommunications equipment and related services to qualified schools, with over 30,000 applications from schools and libraries seeking funds each year.
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. The indictment charges the defendants with conspiracy to commit wire fraud and wire fraud charges.
The case is a reminder of the importance of holding individuals accountable for their crimes, particularly when it comes to programs designed to benefit underprivileged children. As Manhattan U.S. Attorney Geoffrey S. Berman said, "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."
Related Federal Cases
- Mark Thompson, Wire Fraud and Conspiracy, New York NY, 2023 · New York
- Todd Faustin, Workers’ Compensation Fraud, New York NY, 2023 · New York
- Sark Wire Corporation, PPP Fraud, Albany NY, 2023 · Pennsylvania
- Sark Wire Corporation, PPP Loan Fraud, Albany NY, 2020 · New York
- Kenneth Thom, Investment Adviser Fraud, New York NY, 2026 · New York
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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