Receiver Takes Control of N.Y. Hasidic School

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A federal judge has appointed a receiver to take financial control of a private religious school in a small Hasidic Jewish village in New York state.

U.S. District Judge Leonard B. Sand of New York City appointed the receiver to take over the school, called the Yeshiva of New Square, last month. The judge had become frustrated with the community's lack of cooperation with federal prosecutors, who are believed to be investigating possible fraud involving federal aid programs.

New Square is a small, insular village of about 5,000 Hasidic Jews in Rockland County, about 35 miles northwest of Manhattan. Like other Hasidic communities on the outskirts of the New York City metropolitan area, its members seek to preserve Eastern European religious and cultural traditions, such as wearing special garments and speaking Yiddish, with as little influence from the modern world as possible.

While the New York borough of Brooklyn is the religious center for numerous Hasidic sects, many have built suburban communities so that families can escape crowded and fast-changing conditions in the city.

Several of the villages have been the subject of fraud allegations involving federal programs. In Kiryas Joel, N.Y., a community best known for a 1994 U.S. Supreme Court case that invalidated its special public school district, prosecutors have reportedly investigated the alleged diversion of federal funds meant to build a medical center.

The U.S. attorney's office in New York City declined to comment about the investigation of New Square. But a grand jury is reportedly looking into possible tax evasion and misuse of federal housing and education funds, and the federal government has seized bank accounts and records from the local housing authority.

$3.25 Million Fine

The Yeshiva of New Square, which until recently served about 2,000 K-12 students, has run into separate trouble for not cooperating with federal authorities.

According to court documents, Judge Sand held the yeshiva in civil contempt last March for failure to comply with a grand jury subpoena. Federal agents were surrounded and harassed when they tried to serve subpoenas, the court documents say, and some targets were tipped off by other community members so they could flee.

The judge assessed fines totaling $3.25 million against the yeshiva and sought financial documents. When the school argued that it could not pay such a hefty fine, the judge assigned accountants to examine its financial records. Prosecutors feared the yeshiva may have been disposing of financial assets that could be used to pay the fine.

The school refused to cooperate in producing financial data, even when Judge Sand took the unusual step of seeking the assistance of a local rabbinical court. The court, known as a beis din, ordered the yeshiva to cooperate, but it was overruled by a higher rabbinical court in Jerusalem.

Earlier this month, teachers at the yeshiva allegedly surrounded an administrator appointed by the receiver and demanded paychecks that had been delayed. Judge Sand on Jan. 9 called such behavior "shocking" and required court approval for the disbursement of future paychecks.

But lawyers for the yeshiva told the judge on Jan. 9 that it was out of money and had closed its doors. One of the yeshiva's lawyers, Gerald Shargel, did not return several phone calls to his office last week.

Rabbi Mayer Schiller, a resident of the nearby town of Monsey, said that a separate legal entity was being formed for a new yeshiva, which has already begun educating most of the children who were in the Yeshiva of New Square.

"We are thoroughly committed to running everything as kosher as possible," he said about the new Yeshiva Avir Yakov. "Our commitment is to utter and total legal compliance."

That should mean the legal troubles of the Yeshiva of New Square will no longer be a disruption to the village's children, Rabbi Schiller said.

Culture Clash

Several Hasidic communities have run into legal trouble because of an ethos that suggests their members are not bound by civil law, said Samuel Heilman, a professor of Jewish studies and sociology at the City University of New York.

"There is a sense that 'we constitute a separate domain with our own rules. We answer to a higher authority,"' said Mr. Heilman, the author of a new book, Portrait of American Jewry: The Last Half of the 20th Century.

Yet, he noted, such communities are also willing participants in government aid programs.

Vol. 15, Issue 18

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