Grand Rabbi used secret accounts at Bank of IsraelSDJewishWorld
The Grand Rabbi of Spinka, a religious group within Orthodox Judaism, was sentenced Monday morning to two years in federal prison for orchestrating a tax evasion scheme that prosecutors called “an astonishingly complex and sinister enterprise.”
[Spinka charities received nearly $8.5 million in donations and made $744,596 in "profits."]
Grand Rabbi Naftali Tzi Weisz, 61, of Brooklyn, New York, pleaded guilty last summer to a criminal conspiracy charge in which he admitting working with others to obstruct the Internal Revenue Service by soliciting charitable donations to Spinka-related organizations with secret promises to refund donors the vast majority of the money they “donated.”
Weisz was sentenced by United States District Judge John F. Walter, who echoed findings in a pre-sentence report that the refunding and laundering of charitable contributions is a routine and generational practice among certain Hasidic sects that has resulted in hundreds of millions of dollars of unreported income.
........a total of seven individuals have been convicted and sentenced for working together to obstruct the IRS and to operate an unlicensed money transmitting business. Additionally, three donors who “donated” money to Spinka organizations have pleaded guilty to tax evasion prior to indictment and received sentences ranging from three months to six months in prison. Prosecutors have told judge Walter that authorities are investigating more than 100 individuals who were contributors to Spinka organizations. In sentencing one of the donors earlier this year to six months in prison, Judge Walter said that the crime reflected “arrogance” and that other contributors who do not come forward to authorities could face “significantly higher” sentences.
........solicited millions of dollars of contributions to the Spinka organizations by promising to secretly refund up to 95 percent of the contributions. In this manner, the contributors could claim as tax deductions the full amounts of their contributions, while actually having contributed as little as 5 percent of the amount they would declare on their federal income tax returns.
.....In some cases, the contributors received cash payments through an underground money transfer network involving various parties, some of whom operated businesses in and around the Los Angeles jewelry district......
....wire transfers from Spinka-controlled entities into accounts secretly held at a bank in Israel. The accounts were established with the assistance of an international accounts manager at the bank, Joseph Roth, 68, of Tel Aviv, who received a 14-month prison sentence after pleading guilty to helping contributors in the United States obtain loans from the Los Angeles branch of the Israeli bank, loans that were secured by the funds in the secret bank accounts in Israel, so the contributors could have the use of the funds in the United States.
......“This was not a case about religion, tradition, or charitable giving. This was simply a case about greed,” said Leslie P. DeMarco, Special Agent in Charge of IRS – Criminal Investigation’s Los Angeles Field Office..... Full story
Spinka Rebbe Busted on Money Laundering Charges
This is the same type of scam allegedly run by the head of Chabad-Lubavitch in Israel, Rabbi Yosef Yitzchok Ahranow...
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