By Curtis Skinner

NEW YORK (Reuters) – A New York rabbi and three others were indicted for stealing over $12.4 million in public aid for disabled pre-schoolers and using it to spruce up their homes, get catering discounts and fund a relative’s cosmetics business, authorities said on Tuesday.

The four men, who had ties to one of the city’s largest providers of special education services for disabled pre-schoolers, were due in court on Tuesday on criminal charges in a 42-count indictment, including grand larceny, identity theft, and falsifying business records, Queens District Attorney Richard Brown said in a statement.

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If convicted, each faces up to 25 years in prison.

They are accused of stealing money meant to benefit the Island Child Development Center in Queens, a non-profit special education provider for Orthodox Jewish children aged 3 to 5.

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

Rabbi Samuel Hiller, who is the center’s assistant director, and Roy Hoffman, the center’s independent auditor, were accused of using the money to fix up their homes. Hoffman spent $300,000 for a house redesign and diverted $15,000 to his wife’s make-up business. Hiller spent $30,000 on home plumbing work, the prosecutor said.

Hiller also was accused of diverting $8 million to various unrelated religious schools and camps, including $3 million to B’nos Bais Yaakov Academy, a private all-girls school where he is principal.

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The New York State Comptroller’s Office said they uncovered the fraud when the center’s former executive director, Ira Kurman, ran off with his books and records just before a scheduled routine audit meeting in the summer of 2012.

In the indictment, Kurman was accused of making more than $143,000 in loans to community members, including a caterer in exchange for discounts for his daughter’s wedding and his son’s Bar Mitzvah.

A fourth man, Daniel Laniado, described as an investor in the center, was accused of using check cashing locations to liquidate more than $1 million of checks meant to benefit the center.

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The center received roughly $27 million in state funding between 2005 and 2012.

In addition to the criminal charges, the District Attorney’s Office sought forfeiture of over $11 million, of which $1 million has already been repaid.

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Attorneys for the defendants did not immediately respond to requests for comment.

(Editing by Barbara Goldberg; editing by Andrew Hay)

[Sad child via Shutterstock]