Schechter School of Long Island files $35M suit against ex-CFO David Ostrove, alleging theft of funds
In its suit, Schechter School of Long Island alleges that former chief financial officer David Ostrove, above, used millions of dollars in school funds to buy homes, luxury cars and jewelry. Credit: John Roca
Schechter School of Long Island has filed a $35 million notice of claim against a former chief financial officer arrested in 2022 for allegedly diverting millions of dollars in school funds into personal accounts and using the money to purchase rental homes, luxury vehicles, jewelry and historic collectibles.
The Williston Park private school’s notice, filed in Suffolk County Supreme Court on Wednesday, reveals that the school learned of the alleged theft when PayPal’s fraud department notified the Suffolk County District Attorney’s Office of “irregular, suspicious activities and potentially fraudulent transactions” in April 2022.
The claim alleges the official, David Ostrove, 52, of West Islip, stole about $11.7 million from the K-12 Jewish day school, $3.3 million more than what was disclosed by law enforcement officials at the time of the administrator’s arrest.
“Ostrove used his position as a trusted School officer and financial director to steal and line his pockets with millions of dollars stolen by him from School coffers,” reads the notice, filed on behalf of the school by attorney Douglas Nadjari of Uniondale.
Nadjari did not immediately respond to a request for additional comment. In a statement following his 2022 arrest, school officials called Ostrove's alleged scheme a “systematic, sophisticated, and carefully contrived fraud on a chilling scale.”
Ostrove, who was expected to stand trial in the criminal matter late last year, has since changed attorneys and is due back in court on Feb. 20. His new counsel, Ralph Franco Jr. and Todd Spodek of Manhattan, said they look forward to defending him.
"[We] are dedicated to clearing David’s good name," Spodek said in a statement. "We will request that all other litigation be stayed pending the outcome of the criminal trial."
The school’s claim alleges Ostrove, who became the school's CFO in 2012, had full control over its financial accounts, managing cash receipts, deposits and disbursements. The school, which educates more than 250 students, is funded largely through tuition payments and charitable gifts.
“Because of his near exclusive access and control of financial activities and records, Ostrove was able to conceal his scheme and the theft went undetected until approximately April 2022,” Nadjari wrote in the claim.
In a civil forfeiture complaint against Ostrove filed in 2022 by the office of Suffolk County District Attorney Ray Tierney, it is alleged the former administrator opened a PayPal account titled Solomon Schechter Day School of Nassau County in January 2013. Funds from that account, and later a Stripe account set up on behalf of the school, were then funneled through Ostrove’s personal PayPal to Bank of America and TD Bank accounts in his name, according to court documents.
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 in the civil forfeiture action. Prosecutors noted that the initial transfer was “more than 40%” of Ostrove’s $80,000 salary from the school.
The following day, Ostrove wired $29,500 to purchase a 1965 Ford Mustang, court records show. Soon after he allegedly bought a $55,000 2015 Mercedes-Benz SUV for his wife, Terese Ostrove, who is named along with the couple’s daughter, Jenna, as a noncriminal defendant in the civil forfeiture case. Weeks after her 17th birthday in August 2020, Jenna Ostrove received a 2017 Mercedes-Benz C-Class Sedan her father purchased for $47,000, court records show.
“Devious. Brazen. Insatiable. David Ostrove is the epitome of a faithless servant who deceived his superiors and the institution that trusted him, a fraudster who cheated the parents and benefactors with whom he broke bread, a charlatan who swindled the students he was supposed to help obtain an education based on Torah principles,” Suffolk County District Attorney Investigator Paul Rauseo wrote in an affidavit included in the civil forfeiture filings.
Rauseo said of about $10.4 million in funds from tuition, donations and various fees handled by Ostrove, only $1.55 million “reached its intended beneficiary, the Schechter School.” Meanwhile from 2020 to 2022, Ostrove secured more than $750,000 in rental income off five rental homes he purchased on Fire Island beginning in 2019 and paid more than $1.4 million to renovate, court records show.
Ostrove also is alleged to have spent hundreds of thousands of dollars on presidential and sports memorabilia, which prosecutors said he attempted to sell at auction last year.
Schechter School suspended Ostrove’s employment on April 21, 2022. He was terminated upon his arrest in July 2022 on charges of first-degree grand larceny, first-degree money laundering and five counts of second-degree money laundering.
Ostrove also was charged with criminal contempt last year after prosecutors learned of his alleged attempt to sell the collectibles.
Schechter School is seeking a monetary judgment of “not less than $35,100,000 representing compensatory and punitive damages,” according to its notice.
Schechter School of Long Island has filed a $35 million notice of claim against a former chief financial officer arrested in 2022 for allegedly diverting millions of dollars in school funds into personal accounts and using the money to purchase rental homes, luxury vehicles, jewelry and historic collectibles.
The Williston Park private school’s notice, filed in Suffolk County Supreme Court on Wednesday, reveals that the school learned of the alleged theft when PayPal’s fraud department notified the Suffolk County District Attorney’s Office of “irregular, suspicious activities and potentially fraudulent transactions” in April 2022.
The claim alleges the official, David Ostrove, 52, of West Islip, stole about $11.7 million from the K-12 Jewish day school, $3.3 million more than what was disclosed by law enforcement officials at the time of the administrator’s arrest.
“Ostrove used his position as a trusted School officer and financial director to steal and line his pockets with millions of dollars stolen by him from School coffers,” reads the notice, filed on behalf of the school by attorney Douglas Nadjari of Uniondale.
WHAT TO KNOW
- Schechter School of Long Island in Williston Park has filed a $35 million notice of claim against its former chief financial officer.
- David Ostrove, of West Islip, is accused of stealing about $11.7 million from the private school, where he worked for about a decade.
- Ostrove was arrested by Suffolk County authorities in 2022 for allegedly diverting the funds to purchase rental homes on Fire Island, luxury vehicles for family members, jewelry and historic collectibles.
Nadjari did not immediately respond to a request for additional comment. In a statement following his 2022 arrest, school officials called Ostrove's alleged scheme a “systematic, sophisticated, and carefully contrived fraud on a chilling scale.”
Ostrove, who was expected to stand trial in the criminal matter late last year, has since changed attorneys and is due back in court on Feb. 20. His new counsel, Ralph Franco Jr. and Todd Spodek of Manhattan, said they look forward to defending him.
"[We] are dedicated to clearing David’s good name," Spodek said in a statement. "We will request that all other litigation be stayed pending the outcome of the criminal trial."
The school’s claim alleges Ostrove, who became the school's CFO in 2012, had full control over its financial accounts, managing cash receipts, deposits and disbursements. The school, which educates more than 250 students, is funded largely through tuition payments and charitable gifts.
“Because of his near exclusive access and control of financial activities and records, Ostrove was able to conceal his scheme and the theft went undetected until approximately April 2022,” Nadjari wrote in the claim.
In a civil forfeiture complaint against Ostrove filed in 2022 by the office of Suffolk County District Attorney Ray Tierney, it is alleged the former administrator opened a PayPal account titled Solomon Schechter Day School of Nassau County in January 2013. Funds from that account, and later a Stripe account set up on behalf of the school, were then funneled through Ostrove’s personal PayPal to Bank of America and TD Bank accounts in his name, according to court documents.
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 in the civil forfeiture action. Prosecutors noted that the initial transfer was “more than 40%” of Ostrove’s $80,000 salary from the school.
The following day, Ostrove wired $29,500 to purchase a 1965 Ford Mustang, court records show. Soon after he allegedly bought a $55,000 2015 Mercedes-Benz SUV for his wife, Terese Ostrove, who is named along with the couple’s daughter, Jenna, as a noncriminal defendant in the civil forfeiture case. Weeks after her 17th birthday in August 2020, Jenna Ostrove received a 2017 Mercedes-Benz C-Class Sedan her father purchased for $47,000, court records show.
“Devious. Brazen. Insatiable. David Ostrove is the epitome of a faithless servant who deceived his superiors and the institution that trusted him, a fraudster who cheated the parents and benefactors with whom he broke bread, a charlatan who swindled the students he was supposed to help obtain an education based on Torah principles,” Suffolk County District Attorney Investigator Paul Rauseo wrote in an affidavit included in the civil forfeiture filings.
Rauseo said of about $10.4 million in funds from tuition, donations and various fees handled by Ostrove, only $1.55 million “reached its intended beneficiary, the Schechter School.” Meanwhile from 2020 to 2022, Ostrove secured more than $750,000 in rental income off five rental homes he purchased on Fire Island beginning in 2019 and paid more than $1.4 million to renovate, court records show.
Ostrove also is alleged to have spent hundreds of thousands of dollars on presidential and sports memorabilia, which prosecutors said he attempted to sell at auction last year.
Schechter School suspended Ostrove’s employment on April 21, 2022. He was terminated upon his arrest in July 2022 on charges of first-degree grand larceny, first-degree money laundering and five counts of second-degree money laundering.
Ostrove also was charged with criminal contempt last year after prosecutors learned of his alleged attempt to sell the collectibles.
Schechter School is seeking a monetary judgment of “not less than $35,100,000 representing compensatory and punitive damages,” according to its notice.
Grant Parpan covers Suffolk County courts and federal courts for Newsday. A Long Island native, he joined Newsday in 2022.
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