David Ostrove, ex-Schechter School of Long Island CFO, sentenced to maximum for stealing $8.4M in school funds

A Suffolk County judge sentenced the former chief financial officer of the Schechter School of Long Island to up to 25 years in prison Wednesday, following his conviction last month in the theft of $8.4 million from school accounts.

State Supreme Court Justice John Collins called David Ostrove, 52, a “charlatan and a brazen thief” before he ordered the West Islip resident to serve an indeterminate sentence of 8⅓ to 25 years at the Riverhead sentencing.

Twenty-five years is the maximum sentence Ostrove faced.

Ostrove, convicted of first-degree larceny and money laundering at a jury trial in March, defiantly told Collins he had “great respect” for the criminal justice process but expressed no remorse before he was sentenced.

“I do not agree with the jury verdict,” said Ostrove, who used the money to buy five homes on Fire Island, luxury automobiles, sports memorabilia and political collectibles, according to prosecutors. “I will appeal,” he added.

Ostrove’s attorney, Ralph Franco, of Mineola, asked Collins for leniency. Letters sent from Ostrove’s family and friends, he said, showed he was a man willing to dedicate his time and resources to benefit the Schechter School and his loved ones. Ostrove’s wife and adult daughter declined to comment after the sentencing.

“We are disappointed with the court’s sentence,” Franco said. “We were hoping for something less than the maximum, so that is all we have to say.”

Suffolk District Attorney Ray Tierney said in a statement: “This sentence sends a clear message that we take white collar crime extremely seriously here in Suffolk County. … We are satisfied that with both the verdict and sentence that justice has been attained for all of the students, staff, and the community at the Schechter School.”

Over two weeks of testimony at trial, 15 prosecution witnesses described how Ostrove, an 11-year employee of the K-12 Williston Park Jewish day school, transferred credit card revenue from school PayPal and Stripe accounts to his personal banking platforms from 2014 to 2022. School administrators and investigators said Ostrove handled all aspects of school finances and had exclusive access to the accounts the funds were transferred from.

Assistant District Attorney Jessica Lightstone, who tried the case with Blythe Miller, said at trial Ostrove made 786 transfers from business accounts he established in the name of Schechter School to his personal accounts. The school educates approximately 250 students and is funded largely through tuition payments and charitable gifts.

Schechter School president Jeff Shlefstein told Collins before the sentencing that Ostrove was arrested and prosecuted at a time when the nation’s Jewish community was subjected to increasing antisemitic rhetoric and violence, making education in Jewish traditions especially important. Ostrove’s theft, Shlefstein said, prevented the school from implementing programs and hiring administrators and teachers.

“He betrayed our students and he betrayed our trust,” Shlefstein said.

Shlefstein said Jewish traditions emphasize forgiveness and compassion, and that the Schechter School community was ready to move on from Ostrove’s betrayal.

“Schechter is strong,” Shlefstein said. “We can and we will recover.”

Collins ordered Ostrove to pay more than $8.4 million in restitution to the school. The judge also ordered five corporations controlled by Ostrove to pay more than $4.6 million in restitution and fined them $500,000 each.

“The jury quickly saw through your disguises and schemes,” Collins told Ostrove.

Tierney’s office launched its investigation in March 2022 after being notified by PayPal officials of a potential fraud involving the school, Det. Investigator George Bean testified during trial.

Bean said his investigation led him to connect the purchase of the five Fire Island homes between 2018 and 2021 with funds from Ostrove’s personal bank accounts to corporations registered to his home address. Lightstone said during opening arguments Ostrove used school funds to make “top-of-the-line” upgrades to the properties that earned him more than $600,000 in rental income in four years. Other items investigators said Ostrove purchased with school funds include a $15,000 baseball card, $10,000 coin set and $8,000 Olympic gold medal.

Records in a civil forfeiture action against Ostrove show the scheme began on March 24, 2014, when he moved $33,000 from his personal PayPal to a Bank of America account with a $1,154.41 balance, prosecutors alleged. Prosecutors in that case noted the initial transfer was “more than 40%” of Ostrove’s $80,000 salary from the school at the time.

The following day, Ostrove wired $29,500 to purchase a 1965 Ford Mustang, court records show. He later purchased a $55,000 2015 Mercedes-Benz SUV for his wife and a $47,000 Mercedes-Benz C-Class sedan for his daughter, court records show. He also bought expensive gifts for colleagues and gave one fellow business official a check for $30,000, they said at trial.

Prosecutors said Ostrove also used school money to pay for more than $1.4 million worth of renovations on the beach homes. He also used the stolen funds to pay for his daughter’s college education, payments on a home-equity loan for his residence in West Islip, travel expenses, limousine trips and purchases at high-end clothing and jewelry stores.

Bean told the jury he first approached Ostrove in March 2022 at a school business office, where a “calm and cooperative” Ostrove told him the homes were purchased as “personal investments.” A month later, after Bean brought his findings to the former head of the school and the school board president, Ostrove was suspended, the detective testified. He was arrested in July 2022, court records show.

Surveillance videos played at trial showed Ostrove removing binders from the school business office in May 2022, one day before investigators were set to review the information in the binders and more than a week after he was suspended.

Lightstone said Ostrove also transferred hundreds of thousands of dollars into a school bank account after learning of the investigation.

Jurors told Newsday after the verdict was read last month that testimony from the district attorney's supervising senior investigative auditor, Christine Triolo, helped put into perspective just how all the money flowed from the school through Ostrove's personal accounts to make purchases. They also questioned the defense’s decision to not call any witnesses and for Ostrove himself to not testify.

In a separate civil claim filed in January, the Schechter School accused Ostrove of stealing $11.7 million from the school, even more than alleged in the criminal case. Schechter School is seeking a monetary judgment of “not less than $35,100,000 representing compensatory and punitive damages,” according to its notice. That case is ongoing.

Ostrove has been incarcerated at the county jail since his March 12 conviction.