Rabbi Elliot Amsel, a key fund-raiser for indicted Brooklyn Assemblyman Dov Hikind, was indicted himself last week on charges of embezzling $725,000 from Syrit College, the Brooklyn school he runs.
The federal indictment, which was unsealed Tuesday in Brooklyn federal court, also charged Rabbi Amsel with obstructing justice and evading income tax.
Prosecutors said they have tied this case closely to Hikind’s, making Rabbi Amsel the fourth person to be indicted in connection with the Hikind investigation. Besides Hikind, federal embezzlement and fraud indictments have been lodged against Paul Chernick and Rabbi Elimelech Naiman, both senior officials of the Council of Jewish Organizations of Boro Park.
Hikind, who helped COJO obtain hundreds of thousands of dollars in state funds, is alleged to have received at least $40,000 in government money from the charity for travel and hotel expenses, office equipment, political fund raising and yeshiva tuition for his children. Until the probe that led to his indictment last summer — triggered by a Jewish Week investigation — Hikind was widely regarded as among the New York Orthodox community’s more prominent and powerful political leaders.
Chernick and Rabbi Naiman are charged with misappropriating for their own use an additional $750,000 in government funds meant for the charity.
The three, who are scheduled to go on trial May 11, have adamantly denied any wrongdoing.
Tuesday afternoon, Rabbi Amsel, speaking in a calm and poised voice, also pleaded not guilty in his appearance before Judge Charles Sifton. His trial date was set for Sept. 8.
Meanwhile, after being arrested that morning, Rabbi Amsel was released on a $1 million personal recognizance bond secured, in part, with his home in Monsey, N.Y.
Rabbi Amsel and his attorney, Valerie Amsterdam, declined to comment immediately after the hearing. And attempts to reach Amsterdam later were unsuccessful.
The indictment was only the latest bad news for Rabbi Amsel and his school. On Wednesday, State Comptroller H. Carl McCall released an audit of Syrit finding that the school “did not comply in most material respects with the provisions of the law and … regulations” governing the state’s tuition assistance program, known as TAP. As a result, the audit, which covers the school’s performance from 1991 through 1993, recommends that Syrit be required to return almost $3 million in state funds it received under the program.
One state official who reviewed the audit described it as “scathing.”Among other things, the audit found that Syrit took TAP funds for unapproved courses. It concluded the education Syrit offered its students failed TAP eligibility standards. In many cases, the audit said, classes were taught by teachers “not licensed or qualified to teach the courses they were teaching.”
Syrit officials did not return a call seeking comment. But the audit included Syrit responses challenging many of the findings, and rebuttals from the state auditor reasserting his conclusions. This marks Syrit’s second punishment at the hands of state auditors. In 1992, Syrit had to return $2.7 million to the state Department of Education after another audit, covering an earlier period, found the school lacked eligibility records to support its cash claims under TAP.
The school, which mainly serves Brooklyn’s large Orthodox and Russian Jewish populations, was certified by the state Board of Regents in March 1996 as a two-year college qualified to award associate degrees, even as other agencies continued to find serious faults at the school. Gov. George Pataki himself handed Amsel the certification charter in a public ceremony at Hikind’s 1996 political fund-raiser.
The certification came after vigorous lobbying with state officials by Hikind. Rabbi Amsel told The Forward that certification for Syrit was one of the conditions Hikind set down for giving then-Gov. Mario Cuomo his endorsement for re-election in 1994.
The school failed to win certification during Cuomo’s tenure. And Hikind ultimately endorsed Pataki. But a Pataki spokesman denied last year that Syrit’s certification under his tenure was influenced by politics.
The school, which is in Hikind’s district, donated $33,250 to various Hikind political campaign committees, and Rabbi Amsel donated more than $12,000 since 1986, according to the Village Voice.
This week’s 10-page indictment charges that from 1991 through 1994, Rabbi Amsel siphoned off some $489,000 from a $1.3 million contract his school had with COJO to train students as accounting clerks. The indictment charges that Rabbi Amsel deposited the siphoned funds into personal bank accounts he held here and in Israel.
Syrit was subcontracted by COJO to train more than 600 students under the COJO program, which in turn was funded by the U.S. Labor Department.
The indictment charges that Rabbi Amsel took another $206,000 from Syrit via a separate not-for-profit corporation he also controlled. The nonprofit group, known as the Institute of Judaic Culture and History, received the money for services it “purportedly” provided to Syrit, the indictment charged, and then disbursed it to Rabbi Amsel, who did not disclose his relationship to the institute.
Finally, Rabbi Amsel pocketed illicit profits via a for-profit company he controlled that did business with Syrit, the indictment charged. The company, Borough Development Inc., bought $435,000 worth of computers; sold them to his school at a 25 percent markup; and channeled $30,000 of this money to himself and “other entities he controlled,” according to the indictment.
The tax evasion charge stems from Rabbi Amsel’s failure to report much of this income on his federal returns, according to the indictment. The obstruction of justice charge, it said, was due to false claims by Rabbi Amsel that records subpoenaed by federal agents during their investigation no longer existed.
“It’s a highly documented paper trail,” said one law enforcement official familiar with the evidence.
A source known to be friendly to Rabbi Amsel pointed out that as head of Syrit, Rabbi Amsel had little need to embezzle to get additional money from the school; he could have simply increased his salary.
“The boss doesn’t embezzle,” argued the source, who spoke on condition of anonymity.
“I’m not overly impressed,” he said of the indictment.