Prosecutors: David Ostrove, ex-Schechter School CFO, moved funds to conceal thefts

A former Williston Park private school's chief financial officer on trial for theft and money laundering began moving funds into a school bank account after learning he was being investigated for stealing millions from the school, a Suffolk prosecutor told jurors Monday during closing arguments.

“He began to scramble and set money where it belonged in the first place, in the Schechter School [of Long Island] bank account,” Assistant Suffolk County District Attorney Jessica Lightstone said of defendant David Ostrove.

“Too little, too late.”

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. The jury of seven women and five men is set to begin deliberations Tuesday.

Prosecutors allege Ostrove diverted $8.4 million in credit card revenue from the Schechter School of Long Island's PayPal and Stripe accounts to his personal banking platforms between 2014 and 2022 to fund a “lavish lifestyle” for himself and his family, buying three luxury vehicles, sports collectibles, historical memorabilia, coins and five homes on Fire Island. Five corporations that prosecutors allege Ostrove, an 11-year employee of the K-12 Jewish day school, set up to purchase the homes are separately charged with money laundering.

Lightstone used flow charts during closing arguments to show how detectives determined Ostrove, who was arrested in August 2022, allegedly redirected the stolen funds across multiple personal bank accounts. The aim, she said, to “conceal the source” of the money used to purchase the Fire Island properties, which generated more than $600,000 in rental income over a four-year period.

Lightstone said in total, Ostrove made more than 750 transfers to personal accounts from ones he established in the name of the school, which educates about 250 students and is funded largely through tuition payments and charitable gifts. Many of those transfers occurred while he was telling administrators the school was in dire financial straits, according to trial testimony from school officials.

“While this small school had to make cuts to student extracurricular programs … the defendant is buying beach houses on Fire Island, cars and expensive collectible memorabilia,” Lightstone said.

Surveillance videos played at trial showed Ostrove removing binders from the school business office after he was suspended in April 2022 that prosecutors said would have provided evidence of the alleged crimes.

Ostrove opted not to testify on his own behalf and the defense rested Friday without calling a witness in the trial, which had been expected to last more than a month. Defense attorney Ralph Franco Jr., of Manhattan, told Collins the defense had considered calling one former school official to testify but decided against it after being told by the woman’s attorney she intended to invoke her Fifth Amendment right against self-incrimination.

Franco instead told the jury Monday that prosecutors and school officials who took the stand during two weeks of witness testimony failed to demonstrate the school sustained “revenue loss.”

“They simply did not enter any evidence at all to show that the school lost money,” Franco said.

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

Lightstone, who prosecuted the case with fellow Assistant District Attorney Blythe Miller, reminded the jury Monday of earlier witness testimony about receiving their financial information directly from Ostrove, often with little time to review the numbers they were provided.

“Complete reliance and full trust, that’s what each of the witnesses from Schechter School’s administration and school board said that they had in [Ostrove] to make financial decisions on behalf of the school and its students,” the prosecutor said.

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.