Queens District Attorney Richard A. Brown and New York State Comptroller Thomas P. DiNapoli today announced that the executive director of the Island Child Development Center, once one of the city's largest providers of special education services to preschoolers with disabilities, has been sentenced to six months in prison and probation after repaying $650,000 in restitution.
The Island Child Development Center (ICDC) was a private not-for-profit company that was located at 1854 Cornaga Avenue in Far Rockaway, Queens. The now defunct center primarily provided services for pre-school children of the Orthodox Jewish communities of Far Rockaway in Queens and in Williamsburg and Borough Park in Brooklyn.
State Comptroller DiNapoli said, "My office's audit and extensive investigation with Queens County District Attorney Richard A. Brown brought four scammers to justice for their thefts at the Island Child Development Center. Our joint work resulted in a recovery of $8 million that was stolen from special education funds. I thank D.A. Brown for his thorough prosecution of all four perpetrators."
District Attorney Brown said, "The funds provided to this center were designated to aid children with special needs. However, this defendant and his co-defendants, treated the allocated money as if it were their own personal pocket change. Those who would victimize children for their own personal gain will be brought to justice and held accountable for their actions."
District Attorney identified the defendant as Ira Kurmen, 55, of Hewlett, Long Island. In December 2017, the defendant pleaded guilty to third-degree grand larceny before Queens Supreme Court Justice Richard L. Buchter, who yesterday sentenced Kurmen to six months in jail and five years' probation. As part of the plea agreement, Kurmen paid $650,000 in restitution to the New York City Department of Education.
Kurmen and his three co-defendants – Rabbi Samuel Hiller, 60, of Far Rockaway, Daniel Laniado, 45, of Brooklyn, and Roy Hoffmann, 54, of Woodmere – were indicted on the alleged thefts in 2014. All were accused of illegally diverting millions of dollars of the $27 million ICDC received in state funding to their relatives, their for-profit businesses and for personal expenses including jewelry, a family wedding and home renovations.
Kurmen was the last of the four defendants to be sentenced. Laniado, an ICDC investor, pleaded guilty to first-degree identity theft and was ordered to pay $82,000 in restitution and received a conditional discharge. Laniado also signed a confession of judgment for an additional $1.3 million.
Rabbi Samuel Hiller, who was the assistant director of ICDC, pleaded guilty to first-degree grand larceny and was sentenced to 1 to 3 years in prison and ordered to pay $5 million in restitution. Hoffman, who served as an independent auditor at the center, also pleaded guilty to first-degree grand larceny and was sentenced to six months in jail and five years' probation and paid $180,000 in restitution.
District Attorney Brown pointed out that New York State's Education Law requires that the State Education Department meet the physical and educational needs of children with disabilities. Additionally, within the City of New York, the Department of Education contracts with private service providers to deliver services for those who require them, including Special Education Itinerant Teachers (SEIT) who provide education services in children's homes and other venues.
The thefts were discovered after the Office of New York State Comptroller Thomas P. DiNapoli notified ICDC and specifically, Ira Kurmen, that it planned to conduct a routine audit of SEIT funds provided to ICDC. When state auditors arrived for the meeting, in July 2012, they were informed that Kurmen had left his position and had taken his books and records with him. After further investigation, the auditors referred the case to the Queens District Attorney's Office.
The investigation was conducted by the District Attorney's Detective Bureau and his Economic Crimes Bureau.
The case was additionally investigated by Comptroller DiNapoli's Division of State Government Accountability and Division of Investigations.
The District Attorney thanked the New York City Department of Education (DOE) and the DOE Deputy and Assistant Auditors General for their assistance in the investigation.
Assistant District Attorneys Eleonora B. Rivkin and Charissa Ilardi, of the District Attorney's Economic Crimes Bureau, are prosecuting the case under the supervision of Gregory C. Pavlides, Bureau Chief, and Kristen A. Kane and Christina Hanophy, Deputy Bureau Chiefs, and under the overall supervision of Executive Assistant District Attorney for Investigations Peter A. Crusco.
Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at [email protected], or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236. Review prior cases at http://www.osc.state.ny.us/investigations.