A federal judge in Sacramento ruled late Tuesday that the California branch of one of the world’s largest Jewish religious organizations misappropriated grant funds and now must pay $844,985 in damages and penalties.

U.S. District Judge Morrison C. England Jr. found that Chabad of California violated the federal False Claims Act with bogus statements and certifications in connection with money it obtained through the Urban Areas Security Initiative: Nonprofit Security Grant Program, which provides funding for security upgrades to eligible nonprofits.

The U.S. Department of Homeland Security program is administered here through the California Emergency Management Agency.

In a 21-page order, England found that Chabad knowingly failed to comply with grant requirements and falsely assured the government that it had written procedures to regulate the use of the funds.

Despite assurances that the integrity of the monetary advances were safeguarded under its policies, Chabad used grant funds to pay unauthorized expenses, the judge said in the order.

He ruled that Chabad owed the government $272,495, but that was tripled under a mandatory provision of the federal False Claims Act, bringing total damages to $817,485.

The act also mandates civil penalties when a court finds that the government has been defrauded.

Chabad “either submitted, or caused to be submitted, a total of five separate drawdown requests that were based on false certifications,” England declared. “Thus, the imposition of five separate $5,500 penalties is required, for a total penalty of $27,500. Accordingly, the court determines Chabad’s … liability in this matter is $844,985.”

Chabad of California is part of the Chabad-Lubavitch movement, a branch of Hasidic and Orthodox Judaism. Its institutions provide cultural and educational opportunities at Chabad-run community centers, synagogues, schools and camps.

Chabad-Lubavitch includes a network of more than 3,600 institutions in more than 1,000 cities in at least 70 countries. Chabad of California has more than 100 sites throughout the state, including in Sacramento, Folsom, Roseville and Davis.

England came down hard on Rabbi Boruch Shlomo Cunin, president of Los Angeles-based Chabad of California and West Coast director of Chabad-Lubavitch.

The judge found that Cunin is “the individual undisputedly in charge of managing and executing the entire grant process,” and that his sworn testimony in a deposition is “damning.”

“Rabbi Cunin made it clear that the absence of policies was not an oversight” and “conceded that he never planned to safeguard the grant advances and ensure that funds so received were used only to pay authorized grant costs,” England said.

Cunin “treated the grant advances as if they were gifts to Chabad that, once paid by Cal EMA, were ‘no longer the business of the government,’” England said, quoting the rabbi’s deposition testimony. “(Cunin’s) cavalier attitude shows, at minimum, a reckless disregard.”

In a telephone interview Wednesday, attorney Mark Hathaway, who represents Chabad of California and Cunin, said his clients are disappointed by Tuesday’s ruling and are “reviewing their options.”

And, he added, “It’s unfortunate that Judge England’s order came out the same day that Chabad’s center in New York was attacked, which shows the need for the type of security equipment that was installed (in California) four years ago.”

According to The New York Times, on Tuesday at a Chabad-Lubavitch synagogue in the Crown Heights section of Brooklyn, a man with a history of mental illness slipped into the building, drew a knife and confronted the dozen or so rabbinical students studying in the basement.

The man, identified by police as Calvin Peters, 49, of Valley Stream on Long Island, attacked one of the students, Levi Rosenblat, a 22-year-old from Israel, stabbing him in the head.

After a tense confrontation, a police officer fatally shot Peters when he lunged at officers with the knife, according to The New York Daily News.

Rosenblat, reported to be in critical condition, was taken to Kings County Hospital and later to Bellevue Hospital Center in Manhattan.

In Los Angeles, Hathaway said that “Chabad is very grateful for the efforts of the federal government to protect its facilities and the people that use them.”

The lawsuit is based on information supplied by two whistleblowers. Attorney Michael Hirst, a false claims specialist, filed a complaint in April 2010 on behalf of the whistleblowers. It names Chabad of California and various affiliates as defendants. In October 2012, the U.S. Department of Justice, having determined the validity of the whistleblowers’ claims, intervened in the case as sole plaintiff.

It was the government’s motion for summary judgment that England decided Tuesday.

The whistleblowers, Aria Kozak and his wife, Donna Kozak, of Santa Monica, through their company, Elite Interactive Solutions, installed state-of-the-art video surveillance equipment in several Chabad of California facilities, but were not paid for the work despite repeated requests, according to Hirst.

Instead, the attorney said, Chabad diverted the grant funds to other uses, such as general operations.

“Religious and charitable organizations do not have immunity for fraud,” Hirst said Tuesday. “The ruling today shows that any entity defrauding the United States will be held accountable if courageous whistleblowers are willing to come forward.”

Whistleblowers in a False Claims Act case are entitled to 15 percent to 25 percent of the amount recovered by the government, depending on the extent of their contribution to the complaint’s success. They are also entitled to recover their attorneys’ fees and costs.

The amount the Kozaks will receive has yet to be determined, Hirst said.