The Victorian County Court was told David Kramer, 52, was "shuffled out the back door to Israel" rather than investigated when allegations that he molested boys at Melbourne's Yeshivah College were first aired.
Kramer has pleaded guilty to five charges of indecent assault and one count of indecent acts with a child.
The American-born teacher admitted groping four boys through their clothing between 1990 and 1992.
At his plea hearing on Wednesday, prosecutor Brett Sonnet said Yeshivah's administration had initially declined to stand Kramer down because of concerns for his wellbeing.
Mr Sonnet said Kramer had admitted some of the accusations, but the college did not act until parents staged a protest outside his house.
The school finally agreed to send him to Israel in 1993.
His lawyer Tim Marsh said Yeshivah had covered up his offending.
"There could have been an investigation, there should have been an investigation," Mr Marsh told the court.
"Instead there was a cover-up ... he was quietly shuffled out the back door to Israel."
The court also heard NSW police were told of the offending in 1996 but did not investigate the issue or pass information on to other authorities.
Kramer was jailed in 2008 in the United States for sexual offences against a child in Missouri, before being extradited to Australia last year.
Mr Marsh said Kramer had shown genuine remorse for his crime, and asked for a minimum sentence of 15 months - which would make him eligible for parole based on time already served.
Mr Sonnet, however, said Kramer should serve at least two to three years for his crimes.
Outside court, victim advocate Manny Waks said he wanted the case to form part of the upcoming royal commission into institutional handling of child abuse allegations.
"Hopefully each and every person who was responsible for whatever happened will be held to full account," he told reporters.
Kramer is believed to be the first employee of a Jewish institution in Australia to plead guilty to child sex crimes.
He will be sentenced on July 24.
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