David Ostrove found guilty of grand larceny, money laundering in $8.4 million theft from Schechter School

Former Schechter School of Long Island chief financial officer David Ostrove was convicted Tuesday of first-degree grand larceny and money laundering for stealing $8.4 million from school accounts and using it to buy five homes on Fire Island, luxury cars and collectibles.

Ostrove, 52, of West Islip, faces 8⅓ to 25 years in prison when he is sentenced by state Supreme Court Justice John Collins in Riverhead on April 17. Five corporations he established to purchase the homes were also found guilty of money laundering.

The jury arrived at a guilty verdict after less than four hours of deliberation.

Ostrove was remanded to the county jail to await sentencing. Defense attorney Ralph Franco Jr., of Spodek Law Group P.C. in Manhattan, had argued prosecutors failed to demonstrate a revenue loss for the school.

"The court is going to give us an opportunity to move to set aside the verdict, so we intend to avail ourselves of that opportunity, basically arguing to the court that there was legally insufficient evidence to sustain the verdict," Franco said outside the courtroom. "So we're obviously very disappointed in the outcome, but optimistic that the court has given us the opportunity to put this motion in writing."

Over two weeks of testimony, 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.

“The school completely relied on the defendant … and they got burned for it,” Suffolk County Assistant District Attorney Jessica Lightstone said in her opening argument Feb. 26. “All the while, he was stealing millions of dollars out from under them.”

Lightstone said Ostrove made 786 transfers from business accounts he established in the name of Schechter School, which educates about 250 students and is funded largely through tuition payments and charitable gifts, to his personal accounts.

Jurors told Newsday after the verdict was read 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.

"The prosecution did a great job," juror Steve Nani said of Lightstone and Assistant District Attorney Blythe Miller. "The last witness had basically brought out a flow chart that basically summarized the whole trial for us, instead of having to dig through all the random numbers."

Nani said with the defense not calling any witnesses, there wasn't much for the jury to argue about during deliberations.

"I was a little surprised that the defendant didn't take the stand or there wasn't some sort of witness for their side," he said.

Fellow juror Matthew Giannino said after arriving at a verdict, some jurors pondered how Ostrove got away with the theft of such a large sum of money for so long.

"Maybe just shuffling around all the money through all these accounts and you know, trying to prevent any red flags coming up from the banks," Giannino said. "That's probably what it was that he was able to get away with it for so long. And then it was actually PayPal with the red flag that was brought to everyone's attention."

The district attorney’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.

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 Ostrove 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.

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.

Ostrove did not testify at trial and the defense rested Friday without calling a single witness.

School officials never “raised the slightest level of suspicion” during Ostrove’s tenure, Franco said, despite a budget finance committee and independent auditors having access to school financial information. Prosecutors said, however, that information had come from Ostrove.

“While David Ostrove was entrusted to manage this money to benefit the children of the Schechter School, he was secretly lining his own pockets,” Suffolk County District Attorney Raymond Tierney said in a statement. “The jury here concluded that the defendant’s lavish lifestyle was funded using the tuition dollars of the hardworking parents of the Schechter School students and, thankfully, the jury held him accountable.”

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.

By Grant Parpan

grant.parpan@newsday.com@GrantParpan

Grant Parpan covers Suffolk County courts and federal courts for Newsday. A Long Island native, he joined Newsday in 2022.