Bepartment of Justice

LLE

FOR IMMEDIATE RELEASE
TUESDAY, MARCH 27, 1984

CIV

202-633-4389

The Department of Justice today filed a civil suit against Rabbi Moshe Horowitz, Be'er Shmuel Talmudical Academy, Congregation ard Yeshiva B'er Schmuet, Inc., and Yeshiva Amod Hatorah, Inc., ali of New York City, seeking to recover more than $1 million of Department of Education funds that Horowitz and the Academy are alleged to have received improperly.

The complaint, filed in U.S. District Court in Brooklyn, lleges that Horowitz made false statements to obtain Basic Lducational Opportunity Grant, Supplemental Educational

Opportunity Grant, and College Work Study funds from 1976 through February 1980.

Be'er Shmuel Academy falsely stated that it was a post-secondary educational institution and that its students received credit at other accredited colleges, according to the complaint. Also, grant money was received for nonexistent or incligible students, the complaint alleged.

Horowitz is under criminal indictment over the matter and is currently a fugitive.

Congregation d Yeshiva B'er Schmuel, Inc., and Yeshiva Amod ah, Inc., are believed to be sham corporations to which Pravitz deposited the proceeds of the illegally obtained funds, according to the civil complaint.

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The False Claims Act, and its statute of limitations, permits the government to seek recovery of double the more than $600,000 of funds granted from 1978 to 1980. The government also seeks return of grant money due to breach of contract from 1976 to 1980. The total sought by the suit is $1.6 million, including damages.

The Department of Education (formerly the Office of Education, Department of Health, Education and Welfare) initiated termination actions (under 45 CFR 168, Subpart E) against the 8 captioned institutions on February 27, 1980. If the institutions are terminated, they would be ineligible to participate in Title IV, Higher Education Act (HEA) student assistance programs for a minimum of 18 months from the effective date of their termination (45 CFR 168.82). After 18 months have lapsed, the institutions may reapply to the Secretary of Education to participate in those programs. 1.A Each of the eight captioned institutions has refused to provide

B.

C.

representatives of the Commissioner of Education and the Secretary
of Health, Education, and Welfare with access to program and
fiscal records the institutions allegedly maintained under the
Basic Educational Opportunity Grant (BEOG), Supplemental Educational
Opportunity Grant (SEOG), College Work-Study (CWS) and National
Erect Student Loan (DSL) programs. Each of the captioned schools
refused to allow the Department of Health, Education and Welfare
arditors to audit its records, each has refused to provide records
and documents, and each has refused to allow its students to be
interviewed.

Testimony of Witnesses and Introduction of Exhibits (see attached
pages).

Section 434(a) of the General Education Provisions Act, as well
as section 174.19 of the NDSL program regulations, 45 CFR 174.19,
section 175.19 of the CWS program regulations, 45 CFR 175.19,
section 176.19 of the Supplemental Educational Opportunity Grant
program regulations, 45 CFR 176.19, and sections 190.82 and 190.85 of
the BBDG program regulations, 45 CFR 190.82 and 190.85, require that
an institution participating in that program keep program and fiscal
records which reflect the receipt and disbursement of federal funds.
Those sections also require that the institution give the Secretary of
HEW or the Comptroller General of the United States, or their duly
authorized representatives, access to such program and fiscal records.
Further, section 168.12 of the General Provisions Regulations Relating