Schechter School files $35M suit against ex-CFO charged with stealing funds

Schechter School files $35M suit against ex-CFO charged with stealing funds
A West Islip man allegedly stole more than $11 million from the Schechter School of Long Island, according to documents. (Photo courtesy of Wikimedia Commons)

The Schechter School of Long Island in Williston Park has filed a $35 million notice of claim against David Ostrove, its former chief financial officer who in 2022 was charged with stealing millions from the school, according to documents. 

The notice, filed Wednesday in Suffolk County Supreme Court, alleges that Ostrove, of West Islipstole approximately $11.7 million from the private school–$3.3 million more than what he was accused of stealing by law enforcement at the time of his arrest. 

The school learned of Ostrove’s alleged theft when PayPal’s fraud department alerted the Suffolk County District Attorney’s Office in April 2022 of suspicious activities.

The ex-school official used his position “as a trusted school officer and financial director to steal and line his pockets with millions of dollars from school coffers,” the school’s notice, filed by Uniondale-based attorney Douglas Nadjari, said. 

Ostrove’s attorneys, Manhattan-based Ralph Franco Jr. and Todd Spodek, told Newsday they were committed to defending Ostrove, who is due in court on Feb. 20 for the criminal trial.

 “We are dedicated to clearing David’s good name,” Spodek said in a statement. “We will request that all other litigation be stayed pending the outcome of the criminal trial.” 

Ostrove, who spent 11 years at the school and served as its chief financial and technology officer and director of operations, allegedly used the school’s PayPal and Stripe accounts to transfer funds into a personal PayPal account between March 2014 and April 2022, officials said. Ostrove then transferred the funds into various other bank accounts that had him listed as the sole account holder, according to the DA.

Prosecutors said Ostrove opened a PayPal account named “Solomon Schechter Day School of Nassau County” in January 2013 before moving funds through his personal PayPal account and sending them to Bank of America and TD Bank accounts in his name. 

Ostrove’s alleged scheme began March 24, 2014, when he took $33,000 from his PayPal account and moved it to his Bank of American account, which had a balance of over $1.1 million, prosecutors said. The next day, Ostrove wired $29,500 to buy a 1965 Ford Mustang, according to documents. Additional purchases allegedly made by Ostrove include two Mercedes Benz cars for his wife and daughter, a 2021 Lincoln Navigator and collectible coins. 

The funds in question were also used to finance his daughter’s college tuition, make home equity payments on his West Islip home and purchase and renovate five homes on Fire Island that gave Ostrove over $600,000 in rental income, according to documents. 

Suffolk County DA Investigator Paul Rauseo said of the $10.4 million total that Ostrove was in charge of for the school, only $1.55 million reached Schechter. 

“David Ostrove is the epitome of a faithless servant who deceived his superiors and the institution that trusted him, a fraudster who cheated the parents and benefactors with whom he broke bread, a charlatan who swindled the students he was supposed to help obtain an education based on Torah principles,” Rauseo said in an affidavit.

Ostrove was fired from Schechter, which is seeking at least $35.1 million for damages, in July 2022 following his arrest. 

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