TRENTON -- A New Jersey rabbi who runs a school for children with developmental disabilities was indicted Wednesday for allegedly stealing public money intended to educate special needs students, authorities said.

Osher Eisemann, 60, the founder and director of the School for Children with Hidden Intelligence in Lakewood, is accused of using a private fundraising nonprofit for the school to launder $630,000 in public tuition funds.

Authorities claim Eisemann used funds from the private Ocean County school, known as SCHI, to invest in a clothing business he was involved with on the side.

A state grand jury indicted him on charges including theft, money laundering, corporate misconduct and misuse of government funds.

Officials from the school came to the rabbi's defense. Through his attorney, Eisemann also denied the charges.

"Rabbi Eisemann has never taken any SCHI funds for his personal use, and we strongly deny that there was any ill intent in the use of SCHI funds," the attorney, Lee Vartan, said in a statement. "We look forward to the complete exoneration of both SCHI and Rabbi Eisemann in this investigation."

SCHI officials said in a statement they were "disappointed that the state of New Jersey has chosen to utilize limited taxpayer resources to proceed with this baseless investigation."

The private school, located in the Jewish enclave of Lakewood, receives about $1.8 million in tuition from public school districts in the area that send their special needs students to SCHI.

The school's statement said it had "provided a superior level of services to meet the unique needs of severely-disabled, medically fragile, and socially-emotionally challenged children and young adults" since 1995.

It was raided by state authorities in June, according to The Asbury Park Press.

According to the state Attorney General's Office, Eisemann is accused of using a fundraising foundation, Services for Hidden Intelligence, to siphon $430,000 in operating funds from the school to invest in the now-defunct clothing company, known as TAZ Apparel, LLC.

He is also accused of transferring another $200,000 belonging to the school through a series of bank accounts into a personal account and then back into the school's coffers "to create the false appearance that he was using personal funds from independent sources to repay debts he owed to the school."

State authorities say they're taking a close look at the school's financial practices. Elie Honig, the director of the state Division of Criminal Justice, said the office was "actively continuing" the investigation.

"We urge anyone with information relevant to this case to contact us confidentially so that we can thoroughly investigate all leads," he said on Wednesday.

The Lakewood public school district faces a $15 million budget shortfall, according to a letter sent by Superintendent Laura Winters to county officials that was made public this week.

S.P. Sullivan may be reached at ssullivan@njadvancemedia.com. Follow him on Twitter. Find NJ.com on Facebook.