July trial set for Lakewood SCHI founder after judge won't toss corruption charges

NEW BRUNSWICK - A judge Wednesday set a July trial date for Rabbi Osher Eisemann,  rejecting a defense motion to dismiss money laundering and corporate misconduct charges against the founder of Lakewood's School for Children with Hidden Intelligence (SCHI).

Eisemann's bid to avoid a new trial on the charges failed at a hearing Wednesday before Superior Court Judge Joseph Paone, who rejected arguments by defense attorney Lee Vartan that the case should be dismissed.

Vartan argued that the indictment against the 66-year-old Lakewood resident should be thrown out because the state attorney general's office kept potentially exculpatory evidence from the defense not only at the time of the Eisemann's first trial in 2019, but even after the defendant won a motion in 2022 granting him a new trial.

A series of unsuccessful appeals of that ruling by the state had so far delayed the new trial.

At Wednesday's hearing, Deputy Attorney General Jeffrey Manis argued the potentially exculpatory evidence in question - an exhibit made from QuickBooks accounting entries - was regenerated with the accounting software and turned over to the defense in June, just a day after Paone ordered it be given to the defense.

Paone, when granting the new trial, said the state's withholding of evidence did not constitute willful misconduct. On Wednesday, he said the state's conduct was not serious enough to warrant dismissal of the charges.

Paone set a date of July 9 for Eisemann to be retried.

Eisemann founded the SCHI school in 1995 to serve a handful of developmentally delayed, medically fragile and emotionally challenged children, in part because he has a child with special needs. The school, on Oak Street in Lakewood, now serves more than 600 special needs youngsters, according to its website.

When the attorney general's office first brought the charges against Eisemann in 2017, it said the school received about $1.8 million a month from public school districts that send students there.

The state then alleged that Eisemann diverted $979,000 from the school to his own purposes. But at the 2019 trial, a jury acquitted Eisemann of first-degree corruption of public resources, theft and misapplication of entrusted property.

The jury found Eisemann guilty of money laundering and misconduct by a corporate official based on the state's allegations that he moved $200,000 of school money through private accounts, including his own, before funneling it back to the school through third-party organizations to make it appear he was repaying a debt.

Eisemann filed a motion for a new trial in 2021 after a former bookkeeper for the school came forward and told him she made an accounting error in 2015 that was the same entry upon which the state formed its basis for the criminal conviction.

Vartan has argued that an exhibit the state created from the QuickBooks entries showed the bookkeeper, Rochel Janowski, was the person who made the erroneous accounting entry, but that exhibit containing the potentially exculpatory evidence had been kept from the defense.

Vartan has argued that information vindicates Eisemann.

Janowski said in a certification that Eisemann had no knowledge of the accounting entry in question, but she has yet to be cross-examined on that assertion.

"The bottom line here is, this comes down to a test of credibility,'' Paone said.

After the judge rejected the defense motion to dismiss the charges, Eisemann turned down an offer from the state to plead guilty to money laundering, a second-degree crime carrying a prison term of five to 10 years, in exchange for the state recommending he be sentenced in the range of three to five years.

"You're rejecting that offer?'' Paone asked him.

"Yes,'' Eisemann responded.

Paone scheduled a pretrial conference for May 15.

Kathleen Hopkins, a reporter in New Jersey since 1985, covers crime, court cases, legal issues and just about every major murder trial to hit Monmouth and Ocean counties. Contact her at khopkins@app.com.

This article originally appeared on Asbury Park Press: Lakewood SCHI founder to stand trial in July on corruption charges