AG's press release:
A.G. Schneiderman And Comptroller DiNapoli Announce Sentence Of Former Met Council Chief Financial Officer For Role In Stealing $9m In Kickback Scheme
Friedman Was Integral Part Of Conspiracy To Steal From Publicly Funded Social Services Group
Herbert Friedman Sentenced To 4 Months In Jail And Will Pay $775,000 In Restitution
NEW YORK – Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the felony conviction and sentence of Herbert Friedman, former Chief Financial Officer of the Metropolitan Council on Jewish Poverty (Met Council). Herbert Friedman, together with other co-conspirators, stole approximately $9 million from the taxpayer-funded nonprofit organization in a 20-year grand larceny and kickback scheme.
“The conspirators in this case abused their positions of trust to help steal millions of dollars from a taxpayer-funded charitable organization – one dedicated to serving some of New York City’s poorest and most vulnerable residents,” Attorney General Schneiderman said. “As this case and others have shown, those who rip off taxpayers will be prosecuted and punished. I thank Comptroller DiNapoli for his continued partnership in our efforts to root out public corruption and to ensure that taxpayer money is protected. I also thank the Met Council board of directors for cooperating with our investigation.”
State Comptroller DiNapoli said, "Stealing money meant to aid the needy is just plain wrong. This conviction sends a strong message to those who would violate the public's trust: you will be caught and prosecuted. My office will continue to work with Attorney General Schneiderman as part of our joint task force to root out corruption and protect public money."
Met Council is a New York State not-for-profit organization that provides the poor and elderly in the metropolitan New York City area with social, economic, housing, food and emergency financial assistance as well as anti-family violence programs. Met Council receives funding through New York State and New York City grants, legislative member items and contracts.
Friedman, 80 years old, pleaded guilty on May 6, 2014, before the Honorable Michael Obus in New York County Supreme Court to Grand Larceny in the Third Degree (a class D felony) and Conspiracy in the Fourth Degree (a class E felony). Friedman admitted that between the early 1990s and 2009, he received approximately $250,000 from the grand larceny and kickback scheme. Three other defendants, [haredi Rabbi] David Cohen, [Modern Orthodox former Met Council CEO] William Rapfogel and [Breslov hasidic leader and insurance broker] Joseph [“Yossi”] Ross, previously pleaded guilty in the case. The OAG’s recommended sentence took into account Friedman’s age and medical condition, his cooperation with the investigation and his payment of more than $250,000 in restitution to offset the severe financial loss to Met Council.
Cohen and Rapfogel, previously admitted to their part in the elaborate scheme. The thefts began in 1992, when Cohen devised the scam with Joseph Ross, of Century Coverage Corporation. The company would submit inflated invoices for insurance coverage to Met Council. Met Council would pay the inflated premiums and Ross would then pay cash kickbacks to Cohen, Rapfogel and Friedman, Met Council's chief financial officer until his departure in 2009. Friedman, was responsible for overseeing all payments to outside vendors such as Century.
This sentence is a result of an ongoing investigation by the Attorney General’s Office in conjunction with New York State Comptroller DiNapoli, as part of the Joint Task Force on Public Integrity.
The joint investigation by the Attorney General’s and Comptroller’s offices continues.
Gerard Matheson is the lead investigator assigned to the case. Supervising Investigator Michael Ward of the Investigations Bureau is also working on the case. The Investigations Bureau is led by Chief Investigator Dominick Zarella. Also assisting in the investigation are Supervising Auditor Edward J. Keegan, Associate Auditor Matthew Croghan, and Supervising Investigative Analyst Paul Strocko of the Criminal Enforcement and Financial Crimes Bureau, Legal Support Analyst KerryAnn Rodriguez of the Public Integrity Bureau, and Policy Analyst Liam Arbetman of the Charities Bureau.
This case is being prosecuted by Gary T. Fishman, Chief of the Criminal Enforcement and Financial Crimes Bureau, with Assistant Attorney General Jihee Suh of the Public Integrity Bureau. The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.