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Rabbi charged with stealing $12.4 million from New York disabled kids

By Curtis Skinner

NEW YORK (Reuters) - A New York rabbi and three others were indicted for stealing over $12.4 million in public aid for disabled pre-schoolers and using it to spruce up their homes, get catering discounts and fund a relative's cosmetics business, authorities said on Tuesday.

The four men, who had ties to one of the city's largest providers of special education services for disabled pre-schoolers, were due in court on Tuesday on criminal charges in a 42-count indictment, including grand larceny, identity theft, and falsifying business records, Queens District Attorney Richard Brown said in a statement.

If convicted, each faces up to 25 years in prison.

They are accused of stealing money meant to benefit the Island Child Development Center in Queens, a non-profit special education provider for Orthodox Jewish children aged 3 to 5.

"It is disheartening to see a betrayal of the magnitude alleged in this indictment," Brown said in a statement.

Rabbi Samuel Hiller, who is the center's assistant director, and Roy Hoffman, the center's independent auditor, were accused of using the money to fix up their homes. Hoffman spent $300,000 for a house redesign and diverted $15,000 to his wife's make-up business. Hiller spent $30,000 on home plumbing work, the prosecutor said.

Hiller also was accused of diverting $8 million to various unrelated religious schools and camps, including $3 million to B'nos Bais Yaakov Academy, a private all-girls school where he is principal.

The New York State Comptroller's Office said they uncovered the fraud when the center's former executive director, Ira Kurman, ran off with his books and records just before a scheduled routine audit meeting in the summer of 2012.

In the indictment, Kurman was accused of making more than $143,000 in loans to community members, including a caterer in exchange for discounts for his daughter's wedding and his son's Bar Mitzvah.

A fourth man, Daniel Laniado, described as an investor in the center, was accused of using check cashing locations to liquidate more than $1 million of checks meant to benefit the center.

The center received roughly $27 million in state funding between 2005 and 2012.

In addition to the criminal charges, the District Attorney's Office sought forfeiture of over $11 million, of which $1 million has already been repaid.

Attorneys for the defendants did not immediately respond to requests for comment.

(Editing by Barbara Goldberg; editing by Andrew Hay)

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