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Hassidic New Yorker Arrested in Israel for Fraud

(IsraelWire-2/22-1999) A member of a New York Hassidic Jewish community who has been charged with defrauding federal and state grant, loan and subsidy programs of tens of millions of dollars has been arrested in Israel, US federal prosecutors said on Friday.

Chaim Berger, who was indicted by a Manhattan federal grand jury in 1997, was arrested on Thursday by Israeli police in response to a formal request submitted by the US Department of Justice, which is seeking his extradition, officials said.

Berger is being held in Israel without bail pending a further hearing on Feb. 24.

Berger and six others were charged in a 64-count indictment accusing them of defrauding the federal and state governments to benefit themselves and other residents of the village of New Square in Rockland County, northwest of New York City. New Square is a community of about 6,000 people, most of whom are Hassidim.

Four of the defendants indicted with Berger were convicted three weeks ago following an 11-week jury trial in federal court in White Plains, New York. Two other defendants remain fugitives.

The indictment charges that in one scheme, a Jewish school, or yeshiva, in Brooklyn was financed almost entirely by federal Pell grants awarded by the US Department of Education to ineligible or nonexistent students.

The defendants also allegedly looted state student aid programs, as well as US Small Business Administration and federal housing programs. (UPI)

Man Fighting Extradition to U.S

By Sari Bashi
Associated Press Writer
Sunday, March 7, 1999; 5:33 p.m. EST


JERUSALEM (AP) -- An American citizen accused of stealing tens of millions of dollars in U.S. government aid was ordered released on bail Sunday while an Israeli court decides whether to extradite him.

Chaim Berger, a 73-year-old Hasidic man who has lived in Jerusalem for the past year and a half, is fighting extradition to the United States, where he faces embezzlement, fraud and other charges.

He said through his lawyer Sunday that he is ineligible for extradition because he is an Israeli citizen.

The case comes on the heels of a controversial decision by Israel's Supreme Court last month not to extradite Samuel Sheinbein, a Maryland teen-ager wanted for murder, because he successfully claimed Israeli citizenship through his father.

Under Israeli law, citizens cannot be extradited.

A Jerusalem district court judge on Sunday ordered Berger released on $3.5 million bail and the personal guarantees of two ultra-Orthodox religious leaders and deputy Housing Minister Meir Porush, also an ultra-Orthodox Jew. Berger was to be released Monday.

The U.S. government opposed Berger's release on bail but Israeli prosecutors did not, citing ``unusual circumstances'' such as Berger's age, and the fact that he is a Holocaust survivor.

Berger disappeared from the tiny Hasidic village of New Square, 35 miles northwest of New York City, in May 1997, around the time prosecutors brought charges against seven residents for creating fictitious school programs and businesses through which they could obtain government grants, loans, and subsidies.

He was arrested in Israel on Feb. 18 after the United States asked for his extradition.

U.S. Embassy spokesman Larry Schwartz said Berger was a fugitive who fled to Israel to avoid justice.

``The United States expects that he'll be returned expeditiously to stand trial,'' Schwartz said.

Berger's lawyer, Yehuda Tunik, denied that his client fled the law, saying that he came to Israel ``to retire in the Holy Land'' and that the 64-count indictment was issued only months later.

``Berger became an Israeli citizen legally, when he immigrated here, like any other American Jew,'' Tunik said. ``He didn't come here to hide.''

Bearded, black-hatted members of the ultra-Orthodox community packed the courtroom Sunday, some holding coats over Berger's face to prevent him from being photographed. Berger would not answer questions from reporters.

Charges in the New Square case include conspiracy, mail fraud, wire fraud and embezzlement, which carry maximum prison terms ranging from five to 20 years.

Four defendants have already been convicted, and another two are still at large. No court date has been set yet for the extradition hearing.


(c) Copyright 1999 The Associated Press

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