The founder of Lakewood's School for Children With Hidden Intelligence (SCHI) risks up to 10 years of prison time for each of three charges, if convicted of diverting hundreds of thousands in public tuition funds meant for the special-needs school.

Rabbi Osher Eisemann (NJ Atty. General's Office)

Rabbi Osher Eisemann, 60, was indicted along with Services for Hidden Intelligence, LLC, the foundation that investigators believe was the front for misappropriating the money, according to the office of New Jersey Attorney General Christopher S. Porrino.

Rabbi Eisemann and the foundation face second-dgree charges of theft by unlawful taking, misapplication of entrusted property and property of government, and money laundering. Eisemann is additionally charged with a second-degree count of misconduct by a corporate official.

The indictment was reached in Mercer County. Judge Peter Warshaw assigned the case to Middlesex County, where arraignment has yet to be scheduled.

The indictment is the most recent in a chain of events within a probe by the state Division of Criminal Justice's (DCJ) Corruption Bureau and its Financial and Computer Crimes Bureau.

"We're actively continuing our investigation of Rabbi Eisemann and his alleged use of the school's fundraising foundation in schemes to siphon money away from the school for his personal use," DCJ Director Elie Honig said in prepared comments.

"We urge anyone with information relevant to this case to contact us confidentially so that we can thoroughly investigate all leads."

According to authorities, SCHI's service to special-needs students functions on about $1,800,000 in monthly tuition from the Lakewood school district, and several others. A state formula based on "reasonable, ordinary and necessary" costs determines the tuition rate.

Investigators believe that Services For Hidden Intelligence was a repository for SCHI funds, instead of supporting the school.

Eisemann is accused of dipping into the coffers for about $430,000 to finance various ventures, and laundering another $200,000 to give the impression that he was repaying the debt personally.

One of the enterprises identified by the AG's office is TAZ Apparel, LLC, a discontinued business run by an associate, in which neither the school nor the foundation had ownership interest.

Investigators allege that Eisemann contracted to commit up to $550,000 to support the firm, using funds in foundation accounts to funnel about $277,000 in checks to the company, and to pay about $153,000 in American Express debt that it had amassed.

The director is also accused of moving $200,000 of public tuition money into the foundation from SCHI, transferring it into his personal account through a winding path through TAZ and several other concerns and individuals, over a six-day span, then repaying the school.

In addition to the sentences, the charges carry potential fines of $150,000, $250,000 and $500,000.

Eisemann's defense is being organized by attorney Lee Vartan of the New York-based Holland & Knight law firm. Services for HIdden Intelligence is represented by attorney James J. Mahon of Becker & Poliakoff, also based in New York.

Charges are accusations. Defendants are presumed innocent unless, and until, found guilty in a court of law.

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