Part 2 of The Jewish Week's exposé on the federal E-rate program shows that haredi telecom businesses appear to be complicit in what seems to be an organized and widespread theft of government money by haredi schools – most of which are Satmar and almost all of which are hasidic.
The Jewish Week has just posted Part 2 of its three-part investigative series into what appears to be haredi schools and businesses defrauding the federal E-rate program that provides money for Internet hookups, computers and related technology for schools and libraries.
The money for the program comes from a special tax added to your phone bill, so this haredi behavior directly impacts your pocketbook.
Part 1 of paper’s investigation showed that many of these schools and libraries either do not have computers and Internet hookups even though they collected E-rate money to pay for them or they have a very small number of Internet connected computers – far less that the number they were paid to install – usually locked away where no one can use them.
Part 2 of the exposé shows that more than 4,000 companies nationwide get E-rate payments. Becoming an official provider is a s easy as calling the nonprofit in charge or administering the program in New York and getting a Service Provider Identification Number (SPIN) from them. Applicants also have to give the nonprofit basic contact information. Once approved, the companies have to submit an annual certification form containing the same basic company contact information. They also have to agree that they will abide by the E-rate program’s rules.
This lax supervision appears to have led to widespread scamming of the program by haredi schools and businesses.
The Jewish Week found that most of the service providers are small business with tiny storefronts – or no storefronts at all.
Others are larger haredi telecom companies.
All appear to operate in shady ways and at least one of them is currently being sued by a major telecom company for stealing from yeshivas and reselling high end smart phones they stole and allegedly unlocked. (While the Jewish Week doesn't note this, the "thefts" were probably carried out in cooperation with the yeshivas and the proceeds split between the telecom company and the yeshivas.)
One, Computer Corner, a tiny office in a run down commercial Williamsburg building, was previously involved in defrauding a government program.
Yet it recently tried to get $1.2 million from E-rate to equip, Bais Ruchel D’Satmar, its neighbor, with “internal connections” and provide “internal connections maintenance.”
The nonprofit that runs E-rate and other programs for the Federal Communications Commission, seems to have denied that funding request.
But according to the Jewish Week it did pay Computer Corner more than $500,000 in 2011 for services provided to Bais Ruchel D’Satmar – a school that “12 years earlier was implicated for colluding with the local community school district. The 1999 scheme involved placing dozens of chasidic women on the public schools’ payroll in no-show teaching jobs in order to funnel more than $6 million to the school and its parent organization, United Talmudical Academy,” according to the the Jewish Week.
You can see the list of haredi companies and read about them here.
You can see Part 1 here.