More Lakewood arrests: Raids continue in welfare fraud investigation

Show Caption Hide Caption RAW VIDEO: Lakewood welfare fraud in court Brian Johnston/Staff Video

LAKEWOOD - Six people were arrested Tuesday night in federal and state raids in connection with an ongoing investigation that has so far exposed about $2 million in alleged public-assistance fraud in the town.

State authorities raided three homes Tuesday night, after raiding four homes and arresting eight people Monday on charges of stealing $1.3 million in public assistance.

"This is astronomical in terms of benefits," said a law enforcement source close to the investigation, who added there would be more arrests. "This is just the beginning."

Each of the six people arrested Tuesday is facing a charge of second-degree theft by deception, a state crime, according to a prepared statement from the Ocean County Prosecutor's Office.

The six people are accused of defrauding the government of just over $670,000, according to the prosecutor's office.

Those arrested Tuesday were Yitzchok and Sora Kanarek, of 15 Brisk Lane; Chaim and Liatt Ehrman, of 501 Twin Oaks Drive; and William and Faigy Friedman, of 36 Leigh Drive.

In a statement issued late Wednesday and signed by Rabbi Mose Zev Weisberg, the Lakewood Vaad said it was "saddened beyond words" by the arrests, but added "As firm believers in the principle of ‘innocent until proven guilty,’ we suspend judgment until the disposition of these charges, and are comforted knowing that our judicial system is an able arbiter of justice."

Still, the Vaad -- the influential council of local Orthodox Jewish religious and business leaders -- said it viewed the arrests as a "valuable teaching moment that cannot be wasted."

"There is no such a thing as “justified” theft," the statement continued. "Federal and State social safety-net programs are meant for those in need, even those in need have rules and criteria that must be strictly followed. To deliberately bend a safety-net eligibility rule is stealing, no different than stealing from your friend or neighbor.

"We would all do well to redouble and triple our efforts in our communities, reminding each and every one of us that there is never any excuse for dishonesty in any form."

The group ended its statement by vowing to "launch a set of intensive educational programs that can ensure that such does not happen again," and said the public would be invited to participate.

All six defendants video-conferenced into their first appearances before Judge James Blaney in Ocean County Superior Court Wednesday afternoon, where they were all released on their own recognizance.

What is public-assistance fraud? Fourteen Lakewood residents have been arrested in connection with an alleged $2 million public-assistance fraud scheme.

The prosecution requested that the defendants give up their passports to the Ocean County Prosecutor's Office in addition to checking in monthly over the phone.

MORE: Lakewood welfare raids send some residents scrambling

The Kanareks wrongfully collected $339,002.56 in Medicaid, nutrition assistance, Social Security and federal housing funds, according to the prosecutor's office. The Ehrmans brought in $185,692.22 in improper Medicaid, nutrition assistance, utilities assistance and Sandy relief funds and the Friedmans bilked $149,842.28 in Medicaid, food, energy and housing funds, according to the prosecutor's office.

Raids and arrests were originally scheduled for early Wednesday morning — Payton Guion (@PaytonGuion) June 28, 2017

But law enforcement source tells me the prosecutor moved them up after a media report disclosed the plan for Wednesday morning. — Payton Guion (@PaytonGuion) June 28, 2017

The arrests and raids were originally scheduled for Wednesday morning, but the prosecutor moved them up due to media reports on Tuesday afternoon, according to a law enforcement source.

“These continued arrests demonstrate the partner agencies’ vigilance in addressing government-benefits fraud in the Lakewood community and holding those who steal from New Jersey taxpayers accountable for their actions,” said the source, who wasn’t authorized to speak publicly.

EARLIER: Lakewood rabbi, others arrested in alleged million-dollar welfare fraud

Yitzchok Kanarek is the former rabbi of Oros Yisroel, a school for special-needs students that closed in 2015 due to federal and state tax liens of more than $295,000, according to public records.

Faigy Friedman is listed as the registered agent of a company called Pay-Per Payroll Services LLC, public records show. A brochure for the company lists her home address as the address of the business, which offers payroll services to small businesses. Registered agents are required by the state as a point of contact for a business and are not necessarily the owner of the company.

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Chaim Ehrman is listed as the registered agent of three businesses, according to public records. They are Buy it By Cases, The Jewelers List and True Hue, a cosmetics company. The businesses are not expected to be named in any of the charges, according to law enforcement officials.

Like those arrested Monday, the six people arrested Tuesday are accused of underreporting their incomes over a period of several years to collect public-assistance benefits they weren’t entitled to receive.

Authorities "allege that the defendants misrepresented their income, declaring amounts that were low enough to receive the program's benefits, when in fact their income was too high to qualify," according to a joint statement from Ocean County Prosecutor Joe Coronato and state Comptroller Phillip James Degnan. The families "received income from numerous sources that they failed to disclose on required program applications."

Yosef B. Jacobovitch, of Lakewood-based Schwartz Burton LLP, is representing the Kanareks and Ehrmans. Stacy Ann Biancamano of Biancamano Law in Chatham is representing Faigy Friedman.