I Exposed a Jewish Fraud Ring Stealing From Poor Kids...

Uncovering the Scheme [00:00]

• An investigation into a Jewish fraud ring allegedly stealing from a federal program meant to provide internet access to poor children.
• The program, part of a multi-billion dollar federal initiative, pays for internet and computer access in low-income schools.
• Richard Bernstein pleaded guilty to stealing from the program, admitting to over $100,000 in kickbacks.

  "That's me surrounded by hassidic Jews after investigating a Jewish fraud ring stealing from poor kids."

The Kickback Scheme Revealed [01:56]

• Richard Bernstein admitted to a scheme where he selected internet providers for schools and received kickbacks from them.
• The government paid the internet provider, who then paid Bernstein a cut, a practice known as a kickback.
• One example shows a $68,000 payment to an internet provider, with over $11,000 wired back to Bernstein's firm.

  "That's called a kickback and it's illegal."

Continued Applications Despite Guilty Plea [02:49]

• Despite pleading guilty, Richard Bernstein submitted a new application for school internet funding just five days later.
• Bernstein received a sentence of one year probation and was still legally able to work with the program.
• Weeks after his plea, consultants with the last name Bernstein submitted over 140 applications totaling $3.3 million.

  "So, a man pleads guilty to stealing from this program and the paperwork doesn't even slow down."

The 2018 Rockland County Case [03:54]

• A similar scheme in 2018 involving Orthodox Jewish community members resulted in seven arrests for a $14 million fraud against the same program.
• This case involved consultants and vendors charging inflated prices, using fake companies for bidding, and school administrators accepting kickbacks.
• Equipment was ordered for daycare centers where children were too young to use it, and internet was banned from schools requesting funds.

  "In 2018, seven members of the Orthodox Jewish community were arrested for a $14 million scheme against the same program using the same playbook."

Persistent Fraudulent Practices [05:39]

• Seven fraudsters in New York's Orthodox Jewish community pleaded guilty in 2018, but the program did not ban them until March of the following year.
• One consultant, Simon Gold Brener, continued filing applications 16 days before being banned, 10 years after FBI raids.
• The investigation found that new companies are using the same playbook in 2026, requesting $5.7 million.

  "The door stayed open after they got caught."

The Bernstein Network [06:44]

• Over 140 applications were filed under the last name Bernstein, with multiple companies linked to this name still active.
• Five different Bernstein individuals, including Richard, signed applications.
• Three additional Bernstein firms were found at the same addresses as named government entities, suggesting a wider network.

  "Five different Bernstein kept signing, including Richard himself."

Lack of Competition in Bidding [08:04]

• The investigation highlights a lack of competitive bidding, with schools often accepting only one bid.
• Or Ami, a Brooklyn school, requested $18,000 a month for internet, significantly higher than market rates.
• School administrators, when questioned, often deferred to consultants or claimed ignorance about the billing details.

  "So, I'm trying to figure out why you wouldn't competitively bid for this service."

Overpriced Services and Inflated Costs [11:15]

• Schools are paying significantly more for internet services than the market rate, with prices sometimes triple the median cost.
• The government covers 90% of these inflated internet bills, incentivizing schools to accept higher costs.
• The scheme ensures that neither the school nor the provider has a financial incentive to reduce costs, as the government pays the difference.

  "Same wire, same speed, nearly triple the price."

The Role of Consultants [12:12]

• Consultants play a key role in the scheme, often signing off on paperwork and allegedly facilitating inflated pricing.
• School administrators claim they rely on consultants for information and paperwork, but some may be complicit.
• The investigation reveals a pattern of single bids and a lack of due diligence in selecting internet providers.

  "So, you don't advise them as to what numbers or how many switches, anything like that?"

Identifying Key Players: Aaron Kraut [14:29]

• The investigation identified Aaron Kraut as a central figure, with his name appearing on eight of ten companies supplying internet to schools.
• Kraut allegedly created shell companies that competed against each other to create a false sense of a competitive market.
• This tactic mirrors the methods used in the 2018 Rockland County case, where fake competition was used to defraud the program.

  "And one man's name came back on eight of them. Aaron Kraut."

Confronting Aaron Kraut [16:36]

• The investigator attempted to contact Aaron Kraut directly and visited one of his listed addresses.
• Kraut's listed address appeared to be a PO box, and an individual at the location refused to identify themselves.
• The encounter highlights the difficulty in obtaining direct answers from individuals involved in the alleged scheme.

  "I wrote to Aaron Kraut directly and I asked him, 'Two companies you personally signed into existence, one day apart, competing against each other. Explain that.'"

School Administrators' Lack of Awareness [19:08]

• The investigation found that many schools do not use consultants, meaning administrators filled out and signed the applications themselves.
• These administrators swore under penalty of perjury that the information provided was accurate, yet many could not explain the billing or student numbers.
• This suggests either a lack of understanding or potential complicity among school administrators.

  "The school administrators filled out these applications themselves and signed and swore every number on them under penalty of perjury."

Yeshiva Air Yakov Case Study [28:19]

• Yeshiva Air Yakov, with 4500 students, has requested $8.5 million since 1998, collecting half of it.
• In 2011, the school's entire equipment budget was with a company linked to a 2018 fraud ringleader.
• Former students reported no internet infrastructure, yet the school collected significant funds, with the fund noting the applicant did not confirm receiving services.

  "The school's entire equipment budget, $930,000 in one year, sat with Prett's alarm company."

Lakewood, New Jersey: A Hotspot for Fraud [41:36]

• Lakewood, New Jersey, accounted for 10% of New Jersey's applications in 2017, largely through one man, Simon Gold Brener.
• After Brener's arrest, Lakewood's filings collapsed, suggesting a direct link between the consultant and the fraudulent activity.
• New companies, like Power Tech New Jersey, emerged after Brener's arrest, with significantly higher average requests per school.

  "The state of New Jersey was fine. The town was the problem."

Persistent Fraud Despite Prosecutions [42:53]

• Despite prosecutions and arrests, the money flow for these programs has increased significantly.
• The machine of fraud has not only survived but grown through these legal actions.
• Millions in federal paperwork are still being filed, with officially no one helping the schools, yet the money continues to flow.

  "The machine didn't survive through the prosecutions. It grew through them."

Discrepancies in Student Counts [46:00]

• One school, No Child Brooklyn, provided vastly different student counts on the same form, one for program eligibility and another for equipment budget.
• This manipulation of student numbers directly impacts the amount of government funding received.
• The school administrator, Moses Marowitz, signed off on these conflicting numbers, suggesting either unwitting participation or complicity.

  "three different student bodies, one school and one signature."

The Government's Findings in 2018 [46:41]

• The government's 2018 investigation concluded that many schools were unwitting, but some administrators took kickbacks.
• Written contracts were recovered, detailing profit-sharing agreements between school administrators and vendors.
• This indicates a level of direct involvement and financial incentive for some school officials.

  "Prosecutors wrote that many schools were unwitting, but some administrators took cuts."

Continued Kickback Pipeline [47:41]

• The middleman side of the fraud scheme, involving kickbacks between vendors and consultants, is still active and documented.
• Emails reveal a split of money per device and monthly commissions on internet bills.
• While the vendor-consultant kickback pipeline is documented, the direct payment to schools in the current case is not as clearly shown.

  "150 bucks split per Chromebook and a monthly commission on the internet bills."

Lack of Competition and Inflated Prices [40:42]

• An analysis of bid requests shows a staggering 93.7% of bids received one or zero responses, indicating a lack of real competition.
• Schools frequently swore that no other companies responded to their public ads, allowing the same companies to continue billing.
• Prices for internet services at these schools are more than double what others pay for the same service.

  "633 ads, but never real competition."

The Unanswered Question: Who Pays? [48:06]

• The investigation raises the question of whether schools are currently paying their share of the internet bills, as they did in the 2018 cases.
• No current charges or documents explicitly show schools paying their portion, leading to the question of who is ultimately bearing the cost.
• The lack of transparency and the consistent deflection of questions by schools and consultants point to a deeply entrenched system.

  "And the school side of that question, is anyone paying today's schools the way the 2018 schools got paid?"

The Persistent Flow of Funds [52:56]

• Despite Richard Bernstein pleading guilty to crimes ending in September 2022, kickback money continued to flow to a related corporation as recently as August 2024.
• The government's own documents show that the money never stopped, even after the initial charges were filed.
• Richard Bernstein is still not on the government's ban list, allowing him to continue participating in the program.

  "In 2022, the crime ends, but in 2024, the money's still arriving."

The Impact on Children [54:01]

• The primary victims of this alleged fraud are the poor children the program was intended to benefit.
• Every dollar stolen was meant for these children, funded by taxpayers.
• The investigation calls on the FCC and USAC to take action, as they possess all the necessary information to stop the ongoing flow of funds.

  "The first victims here are kids. The poor kids this program was built for."

A Call to Action [54:35]

• The investigator calls out the FCC and USAC, highlighting that they have all the evidence to stop the ongoing fraud.
• Unlike previous cases where bans came years after raids, the money is currently in the hands of these agencies.
• Taxpayers are urged to be aware that their phone bills have funded this scheme, and the investigation aims to expose the truth.

  "You guys have everything on this wall, but you guys banned the last ring 10 years after the FBI raided them."