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April 11, 2016 6:59 am

What’s With All the Jewish Charity Scandals?

avatar by Anne Faith

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A Tzedakah box. Photo: WMPearl.

A Tzedakah box. Photo: WMPearl.

Back in January, a Jewish healthcare charity in New York was ordered to repay $47 million to state and Federal authorities following the revelation of Medicaid fraud. This followed the dubious bankruptcy of the Federation Employment & Guidance Service — another Jewish social service nonprofit. And then there’s the scandal of the Metropolitan Council on Jewish Poverty, whose former director is currently serving a prison sentence for a 20-year attempt to defraud the charity. What’s going on?

CenterLight Healthcare

Formerly known as the Beth Abraham Family of Health Services, CenterLight Healthcare provides long-term care solutions such as nursing, home help, and rehabilitation services. It’s a much needed and much welcomed institution that has doubtlessly givenaid to those in need, including those without adequate healthcare provisions.

However, late last year it emerged that CenterLight “did not play by the rules” (in the words of New York Attorney General Eric Schneiderman) when it came to certain Medicaid dealings. Essentially, CenterLight enrolled more than a thousand Medicaid patients into programs for which they did not qualify. CenterLight then fraudulently claimed state payments. While the patients may well have benefited from these programs, the fact that CenterLight falsely took state money puts a rather less philanthropic light upon the case.

FEGS And The Metropolitan Council on Jewish Poverty

Back in March 2015, another Jewish social organization, the Federation Employment & Guidance Service (FEGS) filed for bankruptcy. Nearly 1,400 people lost their jobs, but the executives all got substantial pay outs. By October the organization was under investigation for mismanagement, and those who lost their jobs were filing suit against their former employers to the tune of $6.6 million.

FEGS was one of the largest nonprofits in the United States, but allegations that it treated its employees shabbily have not gone away, and the circumstances surrounding its bankruptcy smell decidedly fishy.

Coinciding with all of this is the case of the Metropolitan Council on Jewish Poverty. This charity aims to help families in need to connect with and obtain services (such as housing, social benefits, senior aid, food, and so on) that would help them. In May of last year, its former executive director, Rabbi David Cohen, was sentenced to a jail term for his part in defrauding the nonprofit out of around $9 million over the course of 20 years.

All of these events speak volumes about the potential for misbehavior inherent in even ostensibly charitable organizations.

What’s Going On?

Given the predominant and hurtful Jewish stereotypes that abound, it doesn’t have to be said that high-profile financial misdemeanor cases within the Jewish community damage us all. We’re not the first to notice the sudden proliferation of fraud problems in Jewish social aid charities.

The major similarities between these three cases are that they involve Jewish organizations, that the organizations are concerned with social aid, and that fraud/financial mismanagement is at the heart of the cases against them. While these cases may arise more because the Jewish community is so active in philanthropy, we can’t ignore the problem.

On a wider scale, the way in which the government (both Federal and state) interacts with nonprofits is coming under scrutiny from various quarters, which is letting skeletons out of non-profit closets all over the United States. While we may be advised to choose our charities and their directors more wisely in the future, it cannot be said either that the Jewish community has a problem with charity fraud, or that there is a concerted campaign against Jewish nonprofits in the USA. A few bad eggs aren’t representative of our entire community.

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