NYC Stops Funding of Companies that Provide Special Ed Services to Yeshivos as Fraud Probe is Launched

Edited by: TJVNews.com

20 companies that provide special education services to private school students are being blocked by the New York City Department of Education amid concerns of industry fraud, according to published reports.

On Thursday, the New York Times reported that those 20 companies, which primarily serve yeshiva students, provided $60 million in special education services last year alone.

A statement released by some of the companies, accused the DOE of acting unfairly, saying that the agency’s “refusal to engage in conversation with us and restore us as providers in good standing is only harming deserving students who need special education services.”

The NYT reported that in emails sent over the past few weeks, the city education department instructed employees to block the hiring of the companies to provide special education or childcare services.

The move marks a sharp change in the city’s approach to education contracting, particularly in cases of parents of private school students with disabilities seeking city-funded services, the Times reported. While parents must go through a legal process and request that a hearing officer order the funding, the city has for years had a policy of fast-tracking approvals of most such requests. The report indicated that now, the city will challenge requests for it to pay a significant number of companies.

All of the companies that the city has stopped payment to primarily serve students in private Jewish schools, known as yeshivas, especially in the fervently religious Hasidic community, the NYT report says.

The event that spurred this dramatic modification of New York City policy as it pertains to providing financial assistance to cover the cost of special education in the city’s private schools was the arrest of Martin Handler last number. He was charged with stealing millions of dollars in public money intended to pay for early education for low-income children, the NYT reported.  Handler has pleaded not guilty.

Handler is an executive at some of the city’s top-earning special education providers, the report indicated.

Officials say the 20 firms all have ties to Handler or one or more of his four co-defendants or their families, the NYT reported.

“Obviously the allegations in the indictment are very serious and New York City Public Schools is taking a close look at the issues they raise,” said Nathaniel Styer, a spokesman for the city education department, in a statement.

The indictment, and the ensuing city order, followed a New York Times article in December that revealed that many special education providers in the Orthodox Jewish and Hasidic communities had received a windfall of taxpayer money in recent years for services that were sometimes not needed, or even provided, the NYT said.  In response to the article, city officials say they are scrutinizing requests more closely.

The Times had reported in September that scores of Hasidic boys’ yeshivas across Brooklyn and the lower Hudson Valley have collected about $1 billion in taxpayer money in recent years while failing to provide their students with a basic secular education.

Last month, the state education department told Mayor Eric Adams’s administration that by June it must complete a long-delayed investigation into the quality of secular education at more than two dozen Hasidic yeshivas in Brooklyn. The order, signed by state education commissioner Betty Rosa, is the latest signal that the state is ramping up pressure on the city to improve yeshiva education, the Times reported. Last fall, Ms. Rosa ruled that one Brooklyn yeshiva was violating a state law requiring private schools to provide basic English and math instruction. That ruling was overturned an earlier determination by the city that the school was in compliance, the NYT reported.

The criminal case against Handler and his co-defendants could take months to work its way through the court system. According to an indictment unsealed last month in Federal District Court in Manhattan, he stole money through child care firms, some of them secretly owned, including by creating what prosecutors called a “fake after-school program” and billing for services that he never provided. FOX News reported that Handler used the money to dole out no-show jobs, buy real estate and purchase an array of historical religious artifacts at auctions, prosecutors said.

The NYT reported that firms cut off by the city included two that are linked to Handler in public records: Special Education Associates and Kids Domain Childcare Centers. Both companies are operated out of the same building in Borough Park, Brooklyn, as are Handler’s child care businesses.

But also shut out from city business were other firms, including a large company called Special Edge, which received nearly $30 million last year to provide special education in private schools, mostly yeshivas, the NYT reported.

In a statement, representatives of Special Edge and another education company, Evalcare, said none of the indicted men had ever had an ownership interest, officer position or management role in either firm, and had never been employed by Special Edge, the NYT reported.

The city’s “refusal to engage in conversation with us and restore Special Edge and EvalCare Inc. as providers in good standing is only harming deserving students who need special education services,” the statement said.