Witness: Budget, finance committee oversaw work of Schechter School of Long Island CFO David Ostrove, charged with stealing $8.4M
David Ostrove, former Schechter School of Long Island CFO, arrives in Suffolk County Court in Riverhead on Thursday. Credit: James Carbone
Two former administrators at the Schechter School of Long Island told a jury Thursday that a budget and finance committee was tasked with reviewing the chief financial officer's work and an independent accounting firm also audited the school each year.
But it wasn't until a Suffolk County District Attorney's Office investigator approached one of them in April 2022 that they learned former CFO David Ostrove had allegedly transferred $8.4 million in school funds to personal accounts over the previous eight years, they told the jury on the fourth day of testimony in his criminal trial.
"Had anyone ever questioned Mr. Ostrove?" defense attorney Ralph Franco Jr. of Manhattan asked former head of school Cynthia Dolgin, who helped hire Ostrove in 2011.
"No," the administrator responded.
Dolgin testified that Ostrove was guarded about how he handled school finances, sharing only broad overviews of school accounts with her. When she expressed an interest in learning more about how Ostrove used spreadsheets, he declined to show her, she told the jury.
"He said jokingly, or at least I thought he was joking, 'If I showed you all my secrets, you wouldn't need me anymore,'" Dolgin said.
Ostrove, 52, of West Islip, is charged with first-degree grand larceny and first-degree money laundering in the trial before state Supreme Court Justice John Collins in Riverhead. An 11-year employee of the K-12 Jewish day school, he is accused of diverting the funds over an eight-year period from 2014-2022 from school PayPal and Stripe accounts into personal banking platforms and using the money to buy three luxury vehicles, sports collectibles, historical memorabilia, coins and five homes on Fire Island. Ostrove was suspended by the school in April 2022 and arrested that July.
Dolgin said she did raise one specific concern she had with Ostrove, when she personally told him at the start of his tenure to limit credit card payments for tuition. Instead, she told the jury, he allowed more families to pay that way over time.
The increased credit card payments allowed more money to flow into the digital banking platforms prosecutors have said Ostrove used to transfer school revenues into his personal bank accounts, according to witness testimony.
"I was surprised by how much money was coming into the school through PayPal," Dolgin testified, referring to the method the school used to process credit card payments. "[PayPal had] very high fees."
Dolgin said Ostrove had pushed to allow the credit card payments, arguing it provided an "ease of use" and allowed parents of students to earn rewards points from their banks. They agreed to only let parents use credit cards for tuition if they made sizable donations that exceeded processing fees, the administrator testified.
But Dolgin later learned from the investigation that by 2017 Ostrove was allowing "just about everybody" to use credit cards to pay tuition at the Williston Park school.
Richard Levitas, owner of the digital fundraising platform the school used to accept credit card payments and process them through PayPal, and later Stripe, testified earlier that by 2017, Schechter School was using his product, Wizevents, more than just about any other client. Instead of using it only for auction galas, as most schools did, Schechter School was processing everything from prom payments to yearbook orders and drama club tickets through the software, Levitas testified.
"It was great," Levitas told the jury. "I don't have this type of usage … I was very impressed."
Dolgin and her successor as head of school, Scott Sokol, told the jury the school placed significant trust in Ostrove to handle the school's finances. Sokol said he was unaware the school even had a Stripe account until after Ostrove was suspended. Investigators said Ostrove switched to Stripe after PayPal began to question Ostrove's use of the school account.
"I didn't really know how [credit card payments] were processed," Sokol said. "Just that we took them."
Franco also attempted to bring the credibility of Sokol's testimony into question, pointing to invoices he sent to the Schechter School, for whom he now serves as a consultant, to be paid for testimony he gave at a prior hearing regarding the Ostrove case and trial preparation with prosecutors.
Franco asked Sokol if he intended to submit an invoice for his trial testimony.
"I'm really not sure," Sokol said.
The trial will continue with more testimony from Sokol and other school officials Friday.
Two former administrators at the Schechter School of Long Island told a jury Thursday that a budget and finance committee was tasked with reviewing the chief financial officer's work and an independent accounting firm also audited the school each year.
But it wasn't until a Suffolk County District Attorney's Office investigator approached one of them in April 2022 that they learned former CFO David Ostrove had allegedly transferred $8.4 million in school funds to personal accounts over the previous eight years, they told the jury on the fourth day of testimony in his criminal trial.
"Had anyone ever questioned Mr. Ostrove?" defense attorney Ralph Franco Jr. of Manhattan asked former head of school Cynthia Dolgin, who helped hire Ostrove in 2011.
"No," the administrator responded.
WHAT TO KNOW
- Two former administrators at the Schechter School of Long Island told a jury Thursday that a budget and finance committee was tasked with reviewing the chief financial officer's work.
- The testimony came on the fourth day in the trial of former CFO David Ostrove, who allegedly transferred $8.4 million in school funds to personal accounts over an eight-year period.
- Former head of school Cynthia Dolgin testified that Ostrove was guarded about how he handled school finances, sharing only broad overviews of school accounts with her.
Dolgin testified that Ostrove was guarded about how he handled school finances, sharing only broad overviews of school accounts with her. When she expressed an interest in learning more about how Ostrove used spreadsheets, he declined to show her, she told the jury.
"He said jokingly, or at least I thought he was joking, 'If I showed you all my secrets, you wouldn't need me anymore,'" Dolgin said.
Ostrove, 52, of West Islip, is charged with first-degree grand larceny and first-degree money laundering in the trial before state Supreme Court Justice John Collins in Riverhead. An 11-year employee of the K-12 Jewish day school, he is accused of diverting the funds over an eight-year period from 2014-2022 from school PayPal and Stripe accounts into personal banking platforms and using the money to buy three luxury vehicles, sports collectibles, historical memorabilia, coins and five homes on Fire Island. Ostrove was suspended by the school in April 2022 and arrested that July.
Dolgin said she did raise one specific concern she had with Ostrove, when she personally told him at the start of his tenure to limit credit card payments for tuition. Instead, she told the jury, he allowed more families to pay that way over time.
The increased credit card payments allowed more money to flow into the digital banking platforms prosecutors have said Ostrove used to transfer school revenues into his personal bank accounts, according to witness testimony.
"I was surprised by how much money was coming into the school through PayPal," Dolgin testified, referring to the method the school used to process credit card payments. "[PayPal had] very high fees."
Dolgin said Ostrove had pushed to allow the credit card payments, arguing it provided an "ease of use" and allowed parents of students to earn rewards points from their banks. They agreed to only let parents use credit cards for tuition if they made sizable donations that exceeded processing fees, the administrator testified.
But Dolgin later learned from the investigation that by 2017 Ostrove was allowing "just about everybody" to use credit cards to pay tuition at the Williston Park school.
Richard Levitas, owner of the digital fundraising platform the school used to accept credit card payments and process them through PayPal, and later Stripe, testified earlier that by 2017, Schechter School was using his product, Wizevents, more than just about any other client. Instead of using it only for auction galas, as most schools did, Schechter School was processing everything from prom payments to yearbook orders and drama club tickets through the software, Levitas testified.
"It was great," Levitas told the jury. "I don't have this type of usage … I was very impressed."
Dolgin and her successor as head of school, Scott Sokol, told the jury the school placed significant trust in Ostrove to handle the school's finances. Sokol said he was unaware the school even had a Stripe account until after Ostrove was suspended. Investigators said Ostrove switched to Stripe after PayPal began to question Ostrove's use of the school account.
"I didn't really know how [credit card payments] were processed," Sokol said. "Just that we took them."
Franco also attempted to bring the credibility of Sokol's testimony into question, pointing to invoices he sent to the Schechter School, for whom he now serves as a consultant, to be paid for testimony he gave at a prior hearing regarding the Ostrove case and trial preparation with prosecutors.
Franco asked Sokol if he intended to submit an invoice for his trial testimony.
"I'm really not sure," Sokol said.
The trial will continue with more testimony from Sokol and other school officials Friday.
Grant Parpan covers Suffolk County courts and federal courts for Newsday. A Long Island native, he joined Newsday in 2022.
