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NY Post
New York Post
15 Apr 2023


NextImg:NYC childcare company racked up hundreds of violations before fraud arrest

A taxpayer-funded childcare provider has racked up nearly 500 violations for inadequate supervision, poor conditions, and failing to do criminal background checks on employees — while its allegedly fraudulent CEO used government cash to buy lavish homes, according to city data and federal prosecutors.

NYC Early Learning Company was cited for a staggering 486 violations in the past three years across 24 locations in the Bronx, Brooklyn and Staten Island, according to city Department of Health data.

Of those, at least 137 — 28% — were deemed “critical,” and 63 public safety hazards.

The chain logged considerably more violations per facility than any other similar-sized childcare company in the city.

Among the violations, inspectors found:

The only childcare company with more violations was Bright Horizons LLC, which had more than 600 at locations throughout the city, although those were spread across 82 different locations.

Martin Handler was indicted on federal fraud charges in January.

Just 10% of Bright Horizons’ violations were marked critical.

No other company had more than 150 violations in total.

The company, which operates under the names Beanstalk and Brightside Academies, had been run for the past five years by CEO Martin Handler, who was indicted in January for allegedly stealing millions in state and federal grants. Handler used “children as currency,” and created “a fake afterschool program” to win around $33 million in combined contracts from the city and federal government beginning in June 2019, according to prosecutors and grant data.

The company operates under the names Beanstalk and Brightside Academies – with the Beanstalk location seen at 2019 White Plains Road.
J.C. Rice

Handler relentlessly pushed to get more low-income students enrolled so the chain would receive more vouchers for government reimbursement, a former employee told The Post.

“If you had any brain you could see right through it,” said the woman, who spoke under the condition of anonymity. “They kept pushing for vouchers instead of care for the kids.”

Handler and the company continued to bill families, for which the government would reimburse the company, long after they removed their children from the program, beginning around the time the pandemic began, the former employee said.

“I’ve had a case where a parent would call me and say ‘Hey, I tried to enroll my kid in another program but you guys are still billing and my child hasn’t been there in a long time,” the former employee said. “And those were the cases that kept coming up, which probably put the spotlight on him.”

Montebello Home
Handler bought this $1.9 million home in Montebello in July but has since put the home back on the market.
Zillow

While the money poured in, Handler bought or invested in a combined $5.5 million in real estate, including a seven-bedroom home in upstate Wurtsboro; a condo in Surfside, Florida, and a three-story, five-unit Crown Heights apartment building, according to property records.

The real estate purchases also included a $1.9 million five-bedroom home in Montebello, New York, a village in Rockland County about an hour north of the city in July, although put the home back on the market for a $2.2 million asking price last month, according to the records.

Handler, 49, was arrested on Jan. 11 alongside his brother, Isadore Handler, the director of disability services at NYC Early Learning Company, and business associates Menachem Lieberman, Harold Schwaartz and Ben Werczberger, all of whom either worked or invested in the fraudulent companies, prosecutors said.

Brooklyn apartment
Handler also invested in a $1.775 million apartment building in Brooklyn in May 2021.
Stephen Yang

Martin Handler and Werczberger began stealing federal funds intended for the daycare company in November 2019 in increments of $118,050 per month, prosecutors said.

Werczberger then deposited the funds into an account falsely identifying him as “president” of the company, according to court filings which allege the pair stole at least $2.7 million in the scheme.

While running the education company, Martin Handler and Lieberman secretly ran the non-profit Project Head Start, which received more than $90 million in federal funding since 2007. Martin removed himself as Project Head Start’s official owner in March 2017 but secretly ran the mega-nonprofit — funneling federal funds to his own fraudulent for-profit company, NYC Early Learning, prosecutors said.

Martin Handler is charged with wire fraud, conspiracy to defraud the US, theft of government funds, and money laundering.

His brother and Schwartz, 67, are both facing wire fraud and conspiracy to falsify documents charges while Lieberman and Werczberger face money laundering and theft charges. All five have been released on bail.

Neither Handler or NYC Early Learning Company returned messages.