The arrest this week of Platinum Partners hedge fund founder Mark Nordlicht, 48, in what is being described as a billion-dollar Ponzi-like scheme, is causing concern among several Jewish day schools that the New Rochelle resident helped found and support.
Nordlicht was a key figure in launching the Affordable Jewish Education Project (AJE), whose goal is to provide quality Jewish and secular programs for day schools while keeping tuition costs down by combining teachers and online learning to individualize study.
The approach was greeted with both excitement and skepticism when it was introduced a few years ago, with many parents eager to save thousands of dollars in tuition each year, and some educators questioning the methodology.
The chief beneficiary of Nordlicht’s largesse was the Westchester Torah Academy (WTA), which he helped found and where he was president. His wife, Dahlia, is listed as a member of the board of directors, according to the school’s website, and Nordlicht is listed as one of three Friends of WTA board of directors.
Two other AJE-affiliated schools that used the same technique of blended learning and with which Nordlicht was involved are Yeshivat He’atid in Bergen County, New Jersey, and the Hebrew Academy of Long Beach (HALB).
One educator familiar with AJE said he believed that Nordlicht’s arrest could have “a big impact” on the project, but offered no details.
Jeff Kiderman, executive director of AJE, did not return phone and email requests for an interview.
According to an IRS form 990 tax statement from 2014, AJE contributed $420,000 to the Westchester Torah Academy, $100,000 to HALB and $4,300 to Yeshivat He’atid. The statement did not indicate how much, if any, of the donations came from Nordlicht personally.
A 990 tax statement from 2013 indicated that AJE contributed more than $200,000 to a program called BOLD, a five-school initiative that helped the participating institutions increase their use of technology over a three-year period. The program is now over.
The criminal indictment against Nordlicht and five others in what is believed to be the biggest fraud since the Bernard Madoff Ponzi scandal of 2008, alleged that the hedge fund heavily inflated its performance figures, showing no down years and hardly any down months.
All of those arrested pleaded not guilty and have not commented on the case.
News reports noted that when the firm needed new investors, its partners turned to other observant Jews who were in business and who were social friends of Nordlicht, former Platinum President Uri Landesman, who also was arrested, and other key officials.
In recent weeks, as Nordlicht and Landesman seemed to sense that federal agents were about to make a move after a two-year investigation, they discussed fleeing to Israel and not coming back, according to the indictment.
Platinum Partners was launched in 2003, in part through $25 million from Murray Huberfeld, who was arrested earlier this year in connection with an alleged plan to bribe the head of the New York City corrections officers’ union and have him invest $20 million from the union’s coffers into Platinum Partners.