Seven-Year Court Case Ends

Government elects not to intervene in whistleblower
lawsuit against Chabad’
s Michigan Jewish Institute.

JN STAFF

Jews in the D

N

early seven years after a whis-
tleblower filed suit against the
Michigan Jewish Institute (MJI),
the U.S. government has elected not to
intervene.
The whistleblower, Dawn Klobuchar of
Waterford, who worked at MJI as an IT
manager, filed the sealed claim in October
2013, under the federal False Claims Act.
The suit triggered investigations into MJI
that led to the loss of its accreditation.
This is an example of a “qui tam” law-
suit, where a private person pursues a
criminal claim in the name of the govern-
ment and requires the plaintiff to give the
government notice and an opportunity to
take over, if it chooses. According to one
attorney, the government, which usually
makes its decision in 60 days, took an
extraordinarily long time to decide not to
take over the case.
According to U.S. District Court fil-
ings released Jan. 6 and Jan. 14, the suit
claimed that MJI allegedly enrolled thou-
sands of fictious and actual Israeli stu-
dents without their knowledge in a nonex-
istent study-abroad program designed to
fraudulently obtain more than $40 million
in federal Pell Grants, which MJI would
then split between itself and participating
yeshivahs and seminaries in Israel.

CHABAD LUBAVITCH OF
MICHIGAN’
S RESPONSE
According to a statement from the New
York-based-Chabad, on behalf of Chabad
Lubavitch of Michigan, which owns MJI:
“In the years since it was founded, MJI has
helped thousands of disadvantaged indi-
viduals realize their educational dreams,
which, for many of them, would have been
impossible to otherwise attain.
“Outrageous claims by a disgruntled
employee helped spark an almost sev-
en-year investigation, which brought the
good work we were doing to a halt.

“We learned last week that the U.S.
Attorney’
s office has concluded their
investigation and that they will not be
prosecuting the matter, finally bringing
this saga to a close. The wheels of justice
turn slowly, but we were confident all
along that, ultimately, we would be vindi-
cated.”

DEPARTMENT OF EDUCATION
INVESTIGATION
In July 2015, federal agents seized more
than 100 boxes of files from MJI offices
in Southfield in conjunction with a U.S.
Department of Education investigation
into its recertification. MJI lost its accredi-
tation on Sept. 27, 2015.
In 2016, the Education Department
accused MJI of illegally obtaining federal
Pell Grants in its study abroad program
and denied the school recertification in
the Title IV student financial aid program,
making it no longer eligible to receive Pell
Grants. MJI appealed the decision and
lost.
Michigan Jewish Institute filed its last
nonprofit tax forms in 2015 and stopped
functioning as a school in 2016. However,
the school is still incorporated, accord-
ing to its annual report with Michigan’
s
Department of Licensing and Regulatory
Affairs, filed in November 2019 by its
president, Rabbi Kasriel Shemtov.
According to the Chabad statement:
“While we remain committed to fulfilling
our mission of helping individuals achieve
their academic goals, this news is still
fresh, and we are determining the best
path forward in realizing our vision. We
are grateful to those who have stood by us
throughout this almost-seven-year saga.”
The whistleblower now has three
months to move forward with the suit or
dismiss the claim, although she cannot do
so without the consent of the U.S. govern-
ment, according to court documents.

16 | JANUARY 23 • 2020

The Well’s
Daniel Horwitz
to Become CEO
at Miami JCC

Rabbi Daniel Horwitz, founder of The
Well, an innovative outreach organiza-
tion targeting unaffiliated young Jews in
Metro Detroit, announced
Friday that he will be relo-
cating to South Miami,
Fla., to become CEO of the
Alper JCC Miami.
Horwitz, a native
Detroiter, his wife, Miriam,
and their three young chil-
dren will be moving in June.
In a Facebook post Friday, Jan. 17,
announcing his new position, Horwitz
recounted how he was influenced by
Detroit’
s JCC — from swimming and
violin lessons to his bar mitzvah party
to BBYO to playing in the Kenny
Goldman League youth basketball and
participating in Maccabi games — and
said, “The opportunity to join the JCC
movement in this leadership capacity is
truly special.
”
“Our JCC helped shape me, and I’
m
excited to lead an organization that has
the potential to so powerfully shape
others,
” he wrote.
The Alper JCC has a $7 million annu-
al budget, 75 full-time employees and a
23-acre campus with seven buildings.
Horwitz, his staff and a $500,000
annual budget grew The Well in five
years “from concept to powerhouse.
”
Horwitz thanked many people in his
post for support of The Well, especially
founding funder Lori Talsky, Rabbi Paul
Yedwab and other Temple Israel clergy
and staff.
“I’
m incredibly proud of our work
these past five years and am very excit-
ed for The Well to enter its next phase
under new leadership so that it can
reach even greater heights. Don’
t worry
— The Well isn’
t drying up; it’
s plentiful,
and people will still draw from it for
years to come.
”

Rabbi Daniel
Horwitz