A New Jersey rabbi and his wife and three other couples defrauded state and federal public assistance programs out of more than $1 million by underreporting their incomes, according to criminal complaints released Monday.
One of the couples continued to receive Medicaid assistance for their children despite making more than $1 million in both 2012 and 2013, according to one criminal complaint. Another continued receiving benefits in 2014, even though they made $1.8 million the year before, prosecutors said.
Ocean County Prosecutor Joseph Coronato said more arrests are expected as a result of the investigation centered on Lakewood, a New Jersey shore town that is home to a large and growing ultra-Orthodox Jewish community.
Rabbi Zalmen Sorotzkin, of Congregation Lutzk, and his wife, Tzipporah, were charged with collecting more than $338,000 in benefits prosecutors said they weren't entitled to. Their attorney said they will plead not guilty.
They were charged in state court along with Mordechai and Jocheved Breskin, who prosecutors said collected more than $585,000 in benefits they weren't entitled to.
Zalmen Sorotzkin's brother, Mordechai, and his wife, Rachel, were one of two couples charged in separate federal complaints with conspiring to fraudulently obtain Medicaid benefits.
They made more than $1 million in 2012 and in 2013, the complaint alleges, but still received more than $96,000 in Medicaid benefits, including $22,000 to pay for medical expenses when their sixth child was born in November 2013.
"Everything is going to work out and all will be vindicated," said Rachel Sorotzkin's attorney, Fred Zemel.
The couples charged in federal court were released on $100,000 bond and their travel limited to New Jersey, New York and Pennsylvania, while the couples charged in state court were released without bail, but had to surrender their passports.
According to a federal complaint, Yocheved and Shimon Nussbaum hid their income by creating companies that were run by relatives on paper, but that they actually controlled. They made a total of $1.8 million in 2013, but still received Section 8, Medicaid and food benefits into 2014, prosecutors said.
The investigation was initiated by the FBI and the New Jersey Office of the State Comptroller. It later expanded to include US Social Security Administration, the state Department of the Treasury and the Ocean County prosecutor's office.
"Financial assistance programs are designed to alleviate family hardships for those truly in need," Coronato said in a statement. "My office gave clear guidance and notice to the Lakewood community in 2015 of what is considered financial abuse of these programs.
"Those who choose to ignore those warnings by seeking to illegally profit on the backs of taxpayers will pay the punitive price of their actions."