May 13, 2014

Four men affiliated with Queens nonprofit stole $12.4M in state funds meant for special-needs kids

By Dareh Gregorian
New York Daily News

A group of scammers helped themselves to $12 million in state money intended to help special-needs children, using the filched funding to pay for home renovations and wedding and bar mitzvah costs, prosecutors said Tuesday.

The crooked quartet, who all had ties to Island Child Development Center in Queens, acted in “brazen disregard for common decency and the law,” said state Controller Thomas DiNapoli.

The swindle began to unravel in July 2012, when auditors from DiNapoli’s office showed up for a scheduled meeting with Ira Kurman, the executive director of ICDC, a nonprofit that provides special-education services for children between the ages of 3 and 5 year who have disabilities, prosecutors said. The organization received $27 million in state funding between 2005 and 2012.

The state auditors were told that Kurman left his position after the meeting was set up — and took the company’s books and records with him, prosecutors said.

"It's not a good sign when you're doing an audit and the director resigns and you can't find the records," DiNapoli told the Daily News. "That was a tip-off."

DiNapoli’s office turned to the Queens District Attorney for help in investigating the organization. The probe found that almost half of the taxpayer money — some $12.4 million — had been misappropriated by four people, including Kurman, 52.

Kurman, an Orthodox Jew, made more than $143,000 in “loans” to community members who repaid him with goods and services, including catering for his daughter’s wedding and his son’s bar mitzvah, according to prosecutors.

The organization’s assistant director, Rabbi Samuel Hiller, 56, used the funding to pay for $30,000 in plumbing on his Far Rockaway home, prosecutors said. He also allegedly diverted $8 million to a number of religious schools and camps that had nothing to do with ICDC, including $3 million that went to B’nos Bais Yaakov Academy, a private, all-girls school where Hiller serves as principal.

Another defendant, ICDC auditor Roy Hoffmann, 50, used $300,000 of the kids’ cash to redesign his Woodmere home, while ICDC “investor” Daniel Laniado, 41, of Brooklyn, cashed more than $1 million in ICDC checks, prosecutors said.

“It is disheartening to see a betrayal of the magnitude alleged in this indictment,” said Queens District Attorney Richard Brown.

All four defendants looked sheepish at arraignment in Queens Criminal Court, and pleaded not guilty to grand larceny and other charges.

Hiller's lawyer, Marc Agnifilo, said his client is "very uncomfortable being here."

"If you ask about him in his community . . . he's seen as a tremendously giving person," Agnifilo added.

Each faces up to 25 years in prison if convicted.