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Former NYC DOE Senior Official and Three Others Charged with Extortion Conspiracy and Bribery

A complaint was unsealed today in federal court in Brooklyn charging Eric Goldstein, the former Chief Executive Officer of the New York City Department of Education’s (“NYC DOE”) Office of School Support Services (“OSS”), Blaine Iler, Michael Turley and Brian Twomey with conspiring to commit extortion under color of official right and solicitation and giving of bribes relating to programs receiving federal funds. Goldstein was arrested this morning, made his initial appearance this afternoon before United States Magistrate Judge Lois M. Bloom and was released on a $150,000 bond. Turley was arrested in Arkansas this morning and will make his initial appearance in the Western District of Arkansas tomorrow. Iler and Twomey will make their initial appearances in the Northern District of Texas this afternoon.

Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.

“Goldstein is alleged to have abused his position as a senior executive with the Department of Education by soliciting and accepting thousands of dollars in bribes for pure financial gain. In exchange, Goldstein’s co-conspirators obtained lucrative contracts to provide food services that consisted of substandard products that were served to students, teachers and staff in public schools.” stated Acting U.S. Attorney Kasulis. “This Office and its law enforcement partners are committed to ensuring integrity in government contracts, and will not tolerate corruption that compromises the quality of food that is served in New York City public schools.”

“As alleged, Goldstein used his position within the DOE to help promote a business in which he had a financial interest, which is not only illegal, but also doesn’t allow for a fair bidding process between competing interests. As a result of this scheme, Goldstein—and his coconspirators—learned a lesson of their own today in what not to do with taxpayer money,” stated FBI Assistant Director-in-Charge Driscoll.

As alleged in the complaint, from 2008 to 2018, Goldstein was the Chief Executive Officer of OSS. In that role, Goldstein was the NYC DOE senior executive in charge of overseeing the management, budget and operations of several NYC DOE departments, including the Office of Food and Nutrition Services, also known as SchoolFood, which is responsible for managing the food service operations for all New York City public schools. Iler, Turley and Twomey were the founders and operators of a food services company (the “Food Service Company”) that sold food products to retail and food service markets, including schools.

Between 2015 and 2016, Goldstein, while he was head of OSS, together with Iler, Turley and Twome, formed and operated a grass-fed beef importation business called Range Meats Supply Co., LLC (“RMSCO”). During the same time, between 2015 and 2016, Goldstein used his official position within SchoolFood to ensure that the food products promoted and sold by the Food Service Company would be purchased by SchoolFood and served in New York City public schools. In exchange, Iler, Turley and Twomey transferred tens of thousands of dollars to RMSCO for Goldstein’s benefit, including a payment of $7,000 to Goldstein’s personal divorce lawyer and a $3,000 wire transfer to a close relative of Goldstein.

In one instance alleged in the complaint, in October 2016, SchoolFood stopped serving the Food Service Company’s chicken tenders after a NYC DOE employee choked on a bone that had not been removed from a chicken tender supplied by the Food Service Company. Goldstein, who had final approval as to whether and when the chicken tenders would be allowed back in schools, delayed approving the reintroduction of the tenders until Iler, Turley and Twomey agreed to transfer the Food Service Company’s ownership interest in RMSCO to Goldstein as well as to transfer $66,670 to a bank account in RMSCO’s name that Goldstein had opened and controlled. Following weeks of negotiations, on November 29, 2016, Iler, Turley and Twomey agreed to pay the bribe Goldstein was soliciting and one day later, on November 30, 2016, Goldstein approved reintroduction of the Food Service Company’s chicken products in schools. The products were served in schools until April 2017 when, following repeated complaints from students and staff that the chicken tenders continued to contain foreign objects, including plastic, metal and bones, SchoolFood decided to remove all of the Food Service Company’s food products from New York City public schools.

The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni and Laura Zuckerwise are in charge of the prosecution.

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