Chabad fined for misappropriating federal funds

Chabad-Lubavitch of California must pay nearly $850,000 in damages for misappropriating federal grant money, a US court ruled.

Chabad failed to pay for the installation of state-of-the-art video surveillance equipment at several of its buildings from a US Department of Homeland Security grant of $272,495, the Los Angeles Times reported Saturday. Instead, Chabad used the money for operating expenses such as employee payroll, building repairs and utility bills.

The damages assessed by US District Judge Morrison England in a summary judgment filed on December 9 represent a tripling of the grant amount plus penalties.

Whistleblowers Aria and Donna Kozak, whose company installed the surveillance equipment, will receive a portion of the damages, according to the Los Angeles Times. The Kozaks sued Chabad in 2010; the US government later joined the suit.

The grants were administered by the California Emergency Management Agency. Chabad applied for the grant in 2008.