Ex-education company chief ordered to pay $418K, serve 5 years' probation in fraudulent billing case

The former head of a Cedarhurst-based special education company who pleaded guilty to grand larceny in May was ordered to pay $418,000 in restitution and will serve 5 years of probation for fraudulently billing the state, authorities said.

Morton Kramer, 70, of Lawrence was sentenced Friday in state Supreme Court in Manhattan by Justice Daniel P. Fitzgerald.

Neither Kramer nor his attorney could be reached for comment. His now shuttered company provided disability services for young children.

Kramer pleaded guilty to improperly charging school districts for salaries paid to his relatives, according to a Napoli news release issued in May. He is banned for life from providing special education services in the state under the plea agreement.

According to a 2012 audit by state Comptroller Thomas DiNapoli, Kramer's company, IncludED Educational Services, received about $12.6 million in state support during fiscal years 2007-2008 and 2008-2009.

More than $2.6 million was disallowed, DiNapoli's office found.

IncludED could not provide documentation to support the salaries and wages for 50 employees totaling more than $1.5 million. Of that amount, $856,827 was paid out to 11 of Kramer's relatives.

The comptroller found that time records that were absent at the start of his inquiry were provided during the course of the audit, leading the office to believe they were prepared while the investigation was taking place.

Time records for Kramer's daughter had a repeated typographical error, leaving the comptroller to believe they were submitted "in a batch at one time."

No one else was charged in connection with the case.

IncludED also billed the state for $58,249 in personal expenses, which is not allowable. The amount included $15,382 in rent and related costs for Kramer's son, IncludED's controller, who had said he was operating a satellite office in California.

The company had never applied for such an office and it was not approved by the state.

When DiNapoli's office called the landlord, it learned the property was a rental unit for the son and his family. According to the comptroller, the son "admitted that he 'made up' an invoice to obtain reimbursement of $6,000 for the security deposit and rent."

please code this for web use: DiNapoli's office disallowed another $10,700 in expenses from this office that were said to be used for "light fixtures, installation fees, car rental, a computer, an iPhone, electronic accessories, and other items associated with the use of the California property."

DiNapoli, in a statement, said the sentence "shows that those who abuse the state's special education system will be held accountable for their actions. I thank Manhattan District Attorney Cyrus Vance for prosecuting this case and making sure justice was done."