The criminal trial against the West Islip man accused of stealing $8.4 million in school revenue from the Schechter School of Long Island began Monday.
David Ostrove, the school’s former chief financial officer, stole $8.4 million from the private Jewish day school to fund a “lavish lifestyle” for himself, according to the Suffolk County Assistant District Attorney in her opening statement.
Ostrove, 52, is charged with first-degree larceny and first-degree money-laundering.
He worked at the Schechter School, located in Williston Park, for more than a decade. He is accused of funneling school funds to his personal bank accounts through digital money transfer applications PayPal and Stripe over an eight-year span.
The disgraced former CFO is charged with spending the stolen money on a host of luxuries, including the purchase of five homes on Fire Island in a four-year period, two Mercedes Benz vehicles, a 1965 Mustang, a 2021 Lincoln Navigator and collectible coins, the Suffolk County DA’s office said.
“The Schechter School administration put complete trust in [Ostrove] to conduct financial transactions on behalf of and in the best interest of the Schechter School and its students,” ADA Jessica Lightstone told the jury. “The defendant violated that trust.”
Lightstone said Ostrove made 786 transfers from Schechter School business accounts to his personal PayPal and bank accounts from 2014 to 2022. Eventually, PayPal froze the school’s account, said Lightstone.
PayPal places limitations on accounts for several reasons, including unusual account activity, non-compliance with regulatory requirements, excessive claims and charge backs and rapid increase in sales volume, according to the PayPal website.
Ostrove continued to make transfers from a school Stripe account to a personal bank account, Lightstone said.
The Suffolk County DA launched an investigation after being notified by PayPal officials of potential fraud, said Detective and Investigator George Bean. Bean was the only witness to take the stand Monday.
Bean said when he first approached Ostrove in March 2022, Ostrove claimed the Fire Island homes were purchased as “personal investments.” The detective’s investigation connected the purchase of the Fire Island properties with funds from Ostrove’s personal accounts to corporations registered to his home address, the detective said.
Lightstone said Ostrove used school funds to make upgrades to the properties, raking in more than $600,000 in rental income between 2018 and 2022.
A month after Bean first approached Ostrove, Ostrove was suspended from his job as chief financial and technology officer and director of operations at the school, said Bean. Ostrove was arrested in July 2022, according to court records.
Defense attorney Ralph Franco Jr. questioned how one school official could be the sole culprit for such a hefty theft in his opening argument.
“The prosecution is suggesting that for a period of roughly eight years, Mr. Ostrove would have stolen in excess of $1 million a year and nobody knows,” said Franco. “Just think about that.”
The criminal case is expected to continue for five weeks.
