Pennsylvania Man Sentenced In Manhattan Federal Court To 57 Months In Prison For Bribing A New York City Department Of Education Employee In Furtherance Of $2.7 Million Fraud
Fraud Scheme Was Based On False Billing For Services To Special Needs Students That Were Never Provided
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that NELSON RUIZ was sentenced in Manhattan federal court to 57 months in prison and restitution for defrauding the New York City Department of Education (“DOE”) out of approximately $2.7 million and to bribing a DOE employee in furtherance of the fraud scheme. RUIZ pled guilty in December 2012 to one count of mail fraud and one count of bribery concerning programs receiving federal funds before U.S. District Judge John G. Koeltl, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Nelson Ruiz lined his pockets with $2.7 million of scarce New York City resources meant for special-needs children and bribed a public employee in the process. Today, he was made to pay for his crimes with 57 months in prison and restitution of the $2.7 million. We will continue to do everything in our power to pursue and prosecute those who defraud the government, particularly those who shamelessly funnel money away from some of the city’s neediest programs.”
According to the Complaint, the Information, the plea agreement, and statements made in court:
From 2008 through June 2012, RUIZ used six companies that he controlled (the “RUIZ Companies”) to bill the DOE approximately $2.7 million for sign language interpretation services. According to the DOE billing forms that RUIZ submitted, the sign language interpretation services were provided during that time to 11 New York City public schoolchildren – all of whom had varying special needs, including cognitive, developmental, academic, and language delays (the “11 Students”) – at their schools.
None of the sign language interpretation services for which the DOE paid the RUIZ Companies were ever provided to any of the students. In fact, none of the students actually needed the services that the RUIZ Companies claimed to have provided and for which he received approximately $2.7 million. For example, during the 2010-2011 and 2011-2012 academic years, at least three of the 11 Students were not even enrolled in a DOE school. In addition, from July 2010 through May 2012, RUIZ falsely certified on 75 DOE billing forms that he had provided approximately $200,000 worth of sign language interpreting services to one of the 11 Students, even though that student never received any such services during that period and had not been a New York City public school student since 2009. Ruiz also used students’ personal information, submitted fraudulent DOE applications and billing forms, forged the signatures of at least two students’ parents and seven DOE officials – one of whom had died prior to the date of her forged signature, and another who had retired six years prior to the date of her forged signature.
As part of this scheme, RUIZ paid hundreds of dollars each month to a DOE employee, Thomasina Chappell, to whom he submitted the fraudulent billing forms for the 11 Students. RUIZ paid these bribes in exchange for her assistance in, among other things, expediting the processing of and payment to RUIZ for the fraudulent sign language interpretation bills.
In addition to his prison term, RUIZ, 36, of Shohola, Pennsylvania, was ordered to forfeit $2,720,860, representing the proceeds of the crime, including approximately $275,000 that the Government seized from the RUIZ Companies’ bank accounts at the time of RUIZ’s arrest. He was also ordered to pay $2,720,860 in restitution to the New York City Department of Education and a $200 special assessment fee.
Chappell pled guilty in June 2013 to one count of conspiring to commit federal programs bribery in connection with her receipt of cash from RUIZ in exchange for her assistance in processing invoices for sign language interpretation services purportedly being provided by the RUIZ Companies. She faces a maximum sentence of five years in prison, and is scheduled to be sentenced by Judge Koeltl on December 13, 2013.
Mr. Bharara praised the investigative work of the New York City Department of Investigation and the Special Commissioner of Investigation for the New York City School District.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorney Paul Krieger is in charge of the prosecution. Assistant United States Attorney Andrew Goldstein is in charge of the forfeiture aspects of the case.