Hasidic community founder sentenced for theft of aid

By LARRY NEUMEISTER
The Associated Press            05/23/02

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NEW YORK - A 76-year-old Hasidic community founder was sentenced Wednesday to six years in prison after he apologized for the theft of millions of dollars from U.S. government anti-poverty programs.

U.S. District Judge Barbara Jones also ordered Chaim Berger to pay $11.65 million restitution for what she described as a "brazen fraud."

Berger said he was "really very sorry for the problems and shame I have caused for my wife, family, myself and the whole community."

The judge said she was pleased to hear Berger say he recognized it was improper to steal $40 million in federal aid intended for housing, education and business to pursue his goals for himself and his community.

Four of Berger's original co-defendants, all leaders in the Hasidic community of New Square, were convicted and had their sentences shortened by former President Clinton just before he left office a year ago.

Berger had fled to Israel for four years and was extradited.

New Square is a Rockland County village about 35 miles north of New York City.

Federal prosecutors have been investigating whether Clinton commuted the sentences of the men in exchange for New Square's overwhelming vote for his wife, Hillary Rodham Clinton, in her successful bid for the U.S. Senate in 2000.

There was no mention of the controversy at the sentencing.

The judge said Berger recruited "scores if not hundreds of individuals in a scheme to get fed- eral money to subsidize New Square and their residents."

She said Berger made it appear as if the federal money was being spent legitimately.

"Many of the schemes in this so-called educational program were complete shams, documents created from whole cloth to fool auditors," the Manhattan judge said.

Jones rejected the argument of Gustave Newman, Berger's lawyer, that his client did not personally profit from the scheme, finding that Berger benefitted by accepting government-assisted housing.