Perp Walk: Nonprofit ED Gets Jail Time

May 18, 2015       Mark Hrywna      

The former executive director of the Metropolitan Council on Jewish Poverty was sentenced to one year in jail and paid $650,000 in restitution to the Met Council.

A joint investigation between the New York Attorney General and New York State Comptroller revealed that David Cohen, together with former Met Council CEO William Rapfogel and other co-conspirators, stole approximately $9 million from the taxpayer-funded nonprofit as part of a 20-year grand larceny and kickback scheme. Cohen personally stole approximately $650,000 from Met Council, according to authorities.

Cohen is the last of six conspirators in the Met Council scheme to be sentenced for his role in the theft. Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli have also secured the return of nearly $9 million that was stolen from the Met Council.

Today, we have held all of the Met Council conspirators accountable for their roles in this massive theft, which ripped off some of the neediest New Yorkers,” Schneiderman said in a statement May 11 announcing the sentencing. “With this case, as well as the cases that we have brought against more than 60 other public officials and their cronies, our message is clear: No matter who you are, if you steal from New York charities that receive taxpayer dollars, you will face justice,” he said.

I hope these six prosecutions, and nearly $9 million in restitution, will serve as a warning to those who might contemplate similar behavior,” said State Comptroller Thomas DiNapoli.

Cohen previously pleaded guilty to first degree grand larceny, third degree grand larceny and fourth degree conspiracy. As part of his guilty plea, he admitted that from 1992 to 2013, he conspired with Rapfogel and others to steal from Met Council through an elaborate kickback scheme.

At sentencing, Cohen was allowed to withdraw his plea to first degree grand larceny and was sentenced to one year in jail by New York County Supreme Court Judge Michael Obus for third degree grand larceny and fourth degree conspiracy.

Met Council is a New York State nonprofit that provides the poor and elderly in the New York City area with social, economic, housing, food and emergency financial assistance. The organization receives funding through New York State and New York City grants, legislative member items and contracts.

The conspiracy began in 1992, when Cohen devised a scheme with Joseph Ross of Century Coverage Corporation, an insurance company that serviced Met Council. The company would submit inflated invoices for insurance coverage to the nonprofit. Met Council knowingly paid the inflated premiums and then Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council’s former chief financial officer.

In 1993, Rapfogel took over as the head of Met Council, and Cohen served as a consultant to the nonprofit. About six months after Rapfogel took over as executive director, he joined the conspiracy and began receiving kickbacks, either in envelopes of cash or through payments of personal expenses, according to authorities. Initially, Ross paid both Rapfogel and Cohen $20,000 to $30,000 annually, but the inflated amount on the insurance policies increased over time and so did the kickbacks, with Rapfogel ultimately receiving approximately $30,000 per month,

Other conspirators sentenced for their roles in the scheme were:

  • Rapfogel, convicted in July and sentenced to 3 1/3 to 10 years in prison, and ordered to pay $3 million in restitution to Met Council;
  • Friedman, convicted and sentenced to four months in jail, and ordered to pay $775,000 in restitution.
  • Solomon Ross and William Lieber, former insurance brokers for Met Council, each were sentenced in February to five years of probation and $1.5 million in restitution.
  • Joseph Ross was convicted and sentenced in March to 18 months in jail, $534,000 in restitution to Met Council, and a judgment in the amount of $956,000 in favor of Met Council.