Menachem “Max” Lieberman has been sentenced to 52 months in prison for his involvement in fraudulent schemes targeting federally funded childcare programs. The announcement was made by Jay Clayton, the United States Attorney for the Southern District of New York. Lieberman had previously pled guilty before U.S. District Judge Jennifer H. Rearden, who imposed the sentence.
“Max Lieberman defrauded federal childcare programs that provide vital services to our most innocent and vulnerable,” said U.S. Attorney Jay Clayton. He added that Lieberman’s actions exploited collective beliefs in opportunity for personal financial gain.
The court documents reveal that Lieberman engaged in two fraudulent schemes involving federal grant programs designed to assist low-income families with childcare. From 2019 to January 2023, he secretly controlled Project Social Care Head Start Inc., a non-profit entity operating in New York City, despite legal prohibitions against private ownership of such entities. During this period, he paid co-defendant Martin Handler $4.7 million to gain control over PSCHS and redirected its Head Start funding to his own companies.
Lieberman also conspired with others to mislead the U.S. Department of Health and Human Services (HHS) about PSCHS’s governance and operations, including submitting false statements and coordinating misleading testimony during investigations.
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 falsified applications and receipts claiming children attended a non-existent program at PSCHS.
Apart from his prison term, Lieberman was sentenced to three years of supervised release and ordered to pay fines totaling $200,000, restitution of $1,854,543.35 to ACS, and forfeiture of $1,774,543.35.
Jay Clayton praised the efforts of various agencies involved in the investigation including the FBI, IRS-Criminal Investigation division, HHS Office of Inspector General as well as other supporting organizations like USDA Office of Inspector General and NYC Department of Investigation.
The case is being managed by the Public Corruption Unit with Assistant U.S. Attorneys Daniel H. Wolf, Catherine Ghosh, Jacob R. Fiddelman, Stephanie Simon leading prosecution efforts along with Paralegal Specialist Nandita Vasantha.
