Ex Schechter School of Long Island CFO David Ostrove removed binders with financial information, witness tells jury

A former Williston Park private school chief financial officer accused of stealing more than $8.4 million from school coffers removed three binders with school financial information from his office as detectives investigating the alleged theft were set to meet with administrators, an investigator told the jury at his trial in Riverhead on Tuesday.

Det. Investigator George Bean of the Suffolk County District Attorney's Office's Financial Crimes Bureau testified that David Ostrove removed the binders without the permission of Schechter School of Long Island officials on May 4, 2022, two weeks after he was suspended from his employment with the K-12 Jewish Day School, which is funded largely through tuition payments and charitable donations.

The removal of the binders, which was captured on surveillance video shown to the jury, was discovered the following afternoon as school officials looked to turn the binders over to investigators, Bean said.

“Mr. Ostrove did not in any way have permission to come into that [business office],” Bean told the jury.

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 school, he is accused of diverting the funds over an eight-year period from 2014 to 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.

During opening arguments Monday, Assistant Suffolk County District Attorney Jessica Lightstone said the binders were removed by Ostrove to “hide evidence of his crimes” on the same evening school officials were set to meet with detectives.

“You won't see those records [at trial] because [Ostrove] assured you won't see them,” Lightstone told the jury.

In his testimony, which spanned more than four hours over the course of two days, Bean described a series of “unusual transactions” that raised red flags with PayPal and led investigators to key in on Ostrove, whom he said used school funds when he purchased the houses on Fire Island with corporations registered to his home address. Lightstone said Monday that the properties generated $600,000 in rental income for Ostrove from 2018 to 2022.

Defense attorney Ralph Franco Jr., of Spodek Law Group P.C. of Manhattan, suggested during cross examination that Ostrove had a fluid financial arrangement with the school, often using personal funds for school expenses and subletting office space from the school for private accounting work he did.

Franco pointed to a $132,000 check Bean said school administrators had written to Ostrove to cover payments he had made on behalf of the school. Bean also testified, under cross examination from Franco, that some of the collectibles Ostrove purchased were sold at a fundraising auction for the school.

But Bean said the school, which he testified was having financial difficulties and was undergoing a major renovation project at the time, had told Ostrove to stop using personal funds for school business and that the collectibles were just a small fraction of the items Ostrove used school funds to purchase.

Bean said Ostrove transferred $6.4 million from the school's PayPal account to his own personal PayPal account. He later moved $2 million from the school's Stripe account to a personal bank account, Bean said.

“David Ostrove did not have permission to transfer that money into his personal account,” Bean said.

Ostrove was suspended from the school on April 21, 2022, and arrested less than three months later. The five corporations Ostrove set up to purchase the Fire Island properties also were charged with money laundering.

Bean testified it is common for individuals to create corporations when purchasing rental properties, which Franco said Ostrove did on the advice of his attorney for one of the real estate transactions, a member of the Schechter School of Long Island Board of Education.

The trial, which is expected to last five weeks, will continue with more prosecution witnesses Wednesday.

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.