Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
Menachem "Max" Lieberman has been sentenced to 52 months in prison for his involvement in fraudulent schemes targeting federally funded childcare programs. The sentence was announced by Jay Clayton, the United States Attorney for the Southern District of New York. Lieberman had previously pleaded guilty before U.S. District Judge Jennifer H. Rearden.
"Max Lieberman defrauded federal childcare programs that provide vital services to our most innocent and vulnerable," stated U.S. Attorney Jay Clayton. He added that New Yorkers value opportunity, especially for children, and Lieberman's actions exploited this belief for personal financial gain.
The charges against Lieberman stem from two schemes involving federal grant programs designed to assist low-income families with childcare needs. Between 2019 and January 2023, Lieberman secretly controlled Project Social Care Head Start Inc. (PSCHS), a non-profit entity operating in the New York City area. This control was illegal as PSCHS could not be privately owned due to its non-profit status.
Lieberman paid co-defendant Martin Handler $4.7 million to gain control over PSCHS and used its Head Start funding for his own profit-driven companies. To maintain this control, he conspired with others to mislead the U.S. Department of Health and Human Services (HHS) about PSCHS's governance and operations.
In a separate scheme from July 2020 to January 2023, Lieberman defrauded nearly $2 million from the New York City Administration for Children's Services (ACS). He submitted false documents claiming participation in a non-existent program and fraudulently obtained ACS reimbursements exceeding $1.8 million.
In addition to his prison term, Lieberman, aged 48 from Brooklyn, New York, received three years of supervised release and was ordered to pay a fine of $200,000 along with restitution of $1,854,543.35 to ACS and forfeiture of $1,774,543.35.
Jay Clayton commended the efforts of various investigative bodies including the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation among others involved in uncovering these fraudulent activities.
The case is being prosecuted by Assistant U.S. Attorneys Daniel H. Wolf, Catherine Ghosh, Jacob R. Fiddelman, Stephanie Simon with support from Paralegal Specialist Nandita Vasantha under the Office’s Public Corruption Unit.