FLUSHING—An audit found that a couple running a Flushing special needs pre-school bilked the state out of nearly $1.5 million over the years, which they used on their cars, kids’ furniture and even mortgage payments, authorities said.
A state comptroller's office probe of Bilingual SEIT and Preschool’s books, which has branches in Flushing and Elmhurst, found that the school's billings to the state had skyrocketed over the last decade—spiking from $808,935 in 2002-'03 to $15 million in the 2010-'11 school year, The New York Times first reported.
Bilingual SEIT and Preschool runs programs to help kids aged 3- to 5-years-old with disabilities, teaching them communication and motor skills, the company website said.
Teachers employed by the company would give the kids one-on-one lessons at home or at the pre-school.
Companies can bill the state for up to $122 per hour per child for these services-an amount that is reimbursed, whose costs are split by the state and local governments, authorities said.
But auditors found that the company was overcharging the program and noticed that the school's honchos paid themselves hefty salaries. Executive Director Cheon Park overpaid his wife Hyun Ham, who worked as a payroll clerk in the office, more than a $100,000 over a decade, according to officials.
Not just that, they also allegedly avoided paying hundreds of thousands of dollars in taxes, by working as “independent contractors,” and even billed the interest payments on their mortgages to the state.
The spoils also went to the couple’s school-age kids—who were bought expensive toy chests, furniture and goodies from Club Libby Lu, a now-shuttered kids makeover chain.
This audit is the fourth in a series of 18 underway to look into the way $2 billion dollars allocated to the pre-school special education program is being spent, the Times said.
So far, four contractors have been arrested, with schools in the Bronx and Brooklyn all overcharging the program to line their pockets, according to the paper.
Bilingual SEIT and Preschool could not be reached for comment.
The matter has been referred to the Queens District Attorney's office.