Non-Profit Executive Sentenced To 27 Months In Prison For Conspiring To Defraud Federal Government And To Obstruct Federal Administrative Investigation

Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that ARIE RANGOTT was sentenced today to 27 months in prison for conspiring to defraud the federal Head Start program, to submit a false document to the federal government, and to obstruct a federal administrative investigation. RANGOTT was convicted following a two-and-a-half-week trial before U.S. District Judge Jennifer H. Rearden, who also imposed today’s sentence. 

Acting U.S. Attorney Matthew Podolsky said:  “Arie Rangott defrauded a vital federal childcare program that aims to serve one of society’s most vulnerable populations. This Office is committed to bringing to justice those who place greed above their responsibility to be stewards of federal funds, and I commend our law enforcement partners and the dedicated team of career prosecutors for their outstanding work.”

According to the Indictment, public court filings, and the evidence presented at trial:

Between 2021 and January 2023, RANGOTT was the shadow executive director of a non-profit entity, Project Social Care Head Start Inc. (“PSCHS”), that operated in the New York City area. The U.S. Department of Health and Human Services (“HHS”), which administers the federal Head Start program, annually granted to PSCHS millions of dollars that were supposed to be overseen by an independent board of directors, to be used exclusively on the Head Start program, and from which earning a profit is prohibited by law. RANGOTT and others conspired to submit numerous fictitious documents to HHS that fraudulently asserted PSCHS had an independent board of directors and had in place controls to guard against fraud, waste, and abuse. In truth, PSCHS had neither an independent board nor sufficient controls in place. RANGOTT and his co-conspirators used their control over PSCHS to impermissibly direct PSCHS’s Head Start funding to for-profit companies owned by co-conspirators through rampant undisclosed self-dealing.

In December 2021, HHS sent a letter to PSCHS detailing several complaints about self-dealing at PSCHS, among other things. In response, RANGOTT and his co-conspirators prepared and submitted to HHS a report that falsely denied the self-dealing and made other misstatements. Then, in August and September 2022, the HHS Office of the Inspector General opened an investigation into related issues at PSCHS. RANGOTT and his co-conspirators agreed to obstruct that investigation by lying to the investigators, coordinating stories, and submitting false documents.

Several of RANGOTT’s co-conspirators have pled guilty and been sentenced. Among others, Martin Handler and Menachem Lieberman, each of whom secretly controlled PSCHS and directed PSCHS to steer federal funds to their own for-profit companies, pled guilty in March 2024, and Martin Handler was sentenced in October 2024 to 58 months in prison. Isidore Handler, who played a significant role in falsifying documents submitted to HHS, pled guilty in September 2023 and was sentenced in December 2024 to 18 months in prison. Lieberman is awaiting sentencing.

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In addition to today’s prison sentence, RANGOTT, 54, of Toms River, New Jersey, was sentenced to two years of supervised release.

Mr. Podolsky praised the outstanding investigative work of the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation, and the HHS Office of the Inspector General. Mr. Podolsky also thanked the U.S. Department of Agriculture Office of the Inspector General and the New York City Department of Investigation for their assistance.

The prosecution of this case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jacob R. Fiddelman, Catherine Ghosh, Stephanie Simon, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialist Jayda Foote.