Four New York owners of day care services and seven policemen charged for fraud and bribery scheme

MANHATTAN, NEW YORK (BNO NEWS) – Eleven individuals, four owners of day care services and seven policemen, were charged on Tuesday for operating a fraud and bribery scheme through which they obtained more than $18 million, prosecutors announced.

Liudmila Umarov, Lyudmila Grushko, Yana Krugly and Rimma Volovnick, all from Brooklyn, New York were the four owners of day care service providers involved in the scheme.

The New York City cops charged are Leonid Gutnik and Aleksey Vasilyev of the NYC Human Resources Administration (HRA); Aurora Villareal, Dionne Rivers-Ettu, Emile Nekhala and Carolyn Eason of the NYC Department of Health and Mental Hygiene (DOH); and Mariya Rapoport, formerly of the NYC Administration of Children’s Services (ACS).

All eleven defendants were arrested on Tuesday morning as culmination of the “Operation Pay Care.” The defendants are expected to be presented at the Manhattan court later this day.

Umarov controls or is associated with over 30 day care centers in Brooklyn and Staten Island. Her ring of day care centers and owners is commonly referred as “The Congregation.”

From 2007 until this August, Umarov, Grushko, Volovnick and Krugly planned a scheme to defraud the Day Care Subside Program through the day care centers owned or controlled by “the Congregation.”

The scheme consisted in requesting reimbursement to the federal program for providing day care services to children that never received such services. In order to complete the scheme, the Congregation bribed HRA and ACS employees in exchange for names of eligible low-income children.

With these names, obtained without knowledge or permission, the Congregation filled the reimbursement applications. The ring also made corrupt payments to DOH employees in exchange of day care center permits to members of the Congregation despite incomplete and unsatisfactory applications.

As a result, the Congregation received from ACS an excess of $1 million for day care services that were not provided. Between 2007 and 2010, investigators estimate that the Congregation received over $18 million from the Day Care Subsidy program.

The DOH learned of Grushko’s bribery schemes and closed the day care she owned, Sesame Street. To date, the DOH has closed six of the Congregation’s centers due to significant violations and conditions found.

The eleven defendants were charged with conspiring to pay and receive bribes in connection to federally-subsidized programs. They were also charged, except Vasilyev, with mail fraud. The defendants face a maximum penalty of 20 years of imprisonment for the mail fraud counts and up to 5 years behind bars for the bribery counts.

“These defendants chose payoffs and profit over their promise to serve the best interests of children, according to the complaint. Public funds were stolen to line the defendants’ pockets and integrity was thrown out the window,” DOI Commissioner Rose Gill Hearn said.

“The New York City officials charged allegedly betrayed the public’s trust, taking bribes to look the other way and grease Umarov’s gravy train. If proved, the allegations demonstrate that they cared far more for their wallets than about the welfare and well-being of the children they were obligated to protect,” U.S. District Attorney Preet Bharara said.

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