Urban security grantsCalifornia Hasidic group must refund misused DHS security grant money
The California branch of the Hasidic Jewish group Chabad-Lubavitchhas been ordered to pay $844,985 for misappropriating federal funds.In 2008, Chabad applied for a DHS grant as part of the Urban Areas Security Initiative: Nonprofit Security Grant Program, which provides funding for security upgrades to nonprofits that are at high risk of terrorist attacks.Chabad spent $272,495 of grant money on payroll, utility, and other expenses, but now has to pay penalties and damages triple the grant amount under a mandatory provision of the False Claims Act.
The California branch of the Hasidic Jewish group Chabad-Lubavitch has been ordered to pay $844,985 for misappropriating federal funds.
In 2008 Chabad applied for a DHS grant as part of the Urban Areas Security Initiative: Nonprofit Security Grant Program, which provides funding for security upgrades to nonprofits that are at high risk of terrorist attacks. The grant is administered in California by the state’s Emergency Management Agency. The Los Angeles Times reports that Chabad spent $272,495 of grant money on payroll, utility, and other expenses, but now has to pay penalties and damages triple the grant amount under a mandatory provision of the False Claims Act.
In a 21-page order, U.S. District Judge Morrison C. England Jr. noted that Chabad and its director, Rabbi Baruch Shlomo Eliyahu Cunin, failed to comply with grant requirements and falsely assured grant administrators that the organization had written procedures to regulate the use of funds. England ruled that Chabad did not have policies in place to make sure the grant money was not mixed with other organization funds.
“Rabbi Cunin treated the grant advances as if they were gifts to Chabad that, once paid by Cal EMA, were no longer the ‘business of the government,’” England wrote. “Chabad proceeded to use grant funds to pay unauthorized expenses….”
Husband and wife whistleblowers Aria and Donna Kozak, who filed the lawsuit in 2010 and were later joined by the federal government, will receive an undetermined amount of the award. The Kozaks, who own Elite Interactive Solutions, the firm contracted to install video surveillance equipment in several Chabad facilities in California, claim Chabad failed to pay them for work done.
Mark Hathaway, the attorney who represented Chabad and Cunin, told the Sacramento Bee that the court ruling is unfortunate, since it “came out the same day that Chabad’s center in New York was attacked, which shows the need for the type of security equipment that was installed (in California) four years ago.”
Last Tuesday, Calvin Peters, a 49-year-old man with a history of mental illness, drew a knife and confronted several rabbinical students studying in a Chabad synagogue in the Crown Heights section of Brooklyn. Levi Rosenblat, a 22-year-old student from Israel, was stabbed in the head, but is now in stable condition.
