Feds Slam Michigan Jewish Institute for ‘Illegal’ Pell Grant Fraud Scam
Shell Campus: Dov Stein, head of academics at Michigan Jewish Institute, stands outside the entrance to The Shul, a $6 million synagogue in West Bloomfield, where some MJI classes are held. Image by Paul Berger
By Sam Kestenbaum March 8, 2016
The U.S. Department of Education has accused the Michigan Jewish Institute, a college in the Detroit suburb of West Bloomfield, of illegally obtaining federal Pell Grants for its study abroad program.
“The Department will permit this scheme to continue no longer,” the DOE stated in a damning , outlining their investigation.
Last week, the DOE cut off federal funding, denying the school recertification in the Title IV student financial aid program. Most employees were let go and core operations came to a halt.
The letter from the DOE to MJI president Rabbi Kasriel Shemtov reveals that MJI violated all of the essential requirements to be eligible for federal funding, including “substantial misrepresentations” in their record-keeping.
MJI has received millions of dollars in federal grants for its study abroad program. But, the DOE stated, “MJI turned the notion of a study abroad program on its head and demonstrated it was awarding Pell Grants to students who were not ‘regular students.’”
“The evidence the department has reviewed shows that many, if not most, of MJI students had no interest in obtaining, or intention of receiving, a degree or certificate offered by MJI,” stated the DOE letter, signed by Susan D. Crim, director of DOE’s Administrative Actions and Appeals Service Group. “These students had no meaningful connection to MJI, except that MJI used them to illegally obtain Pell Grants on their behalf.”
The letter includes analyses of LinkedIn profiles for around 30 MJI students studying in Israel. “None of these students stated anything about attending MJI,” the letter stated. “To the contrary, these students were all studying at foreign institutions with the purpose of obtaining a degree from a foreign institution, and had no connection to MJI other than as a source of federal funds.”
MJI leadership declined to speak. But in a statement the school said that it would be contesting the action.
“MJI has been accredited by the Accrediting Council of Independent Colleges and Schools (ACICS) since 1998,” the statement read. “ACICS was fully aware of the nature of the programs and the fact that nearly all MJI students were U.S. citizens living in Israel. ACICS concluded that the programs were legitimate career focused programs and that MJI was in compliance with ACICS criteria.”
The DOE’s extensive letter to MJI was also sent to ACICS, which had previously accredited MJI through 2017. ACICS then sent a separate letter to MJI, warning that their accreditation would be revoked.
“I always thought our study abroad program was a bit funny,” one former MJI employee said, speaking anonymously. “But the ACICS had come in and accredited us. So we thought our study abroad program was on the up-and-up.”
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