Fraud Scandal
On December 19, 2007, Rabbi Naftali Tzvi Weisz, his Gabbai, and six other men were charged in connection with an alleged tax fraud scheme in Los Angeles, California. American authorities claimed that the scheme involved soliciting tens of millions of dollars of donations to Spinka charities over a span of approximately ten years, then refunding 80-95% of the funds back to the donor through an Israeli bank, despite the donors' claiming a tax deduction on the full amount. Five Brooklyn Spinka institutions were also named as defendants.
In July, 2009, Weisz and other conspirators pleaded guilty to charges of money-laundering two days before trial. On July 28, he spoke at a public symposium on business ethics in Brooklyn, NY, admitting and apologizing that "things happened that were not supposed to happen... we have to commit that in the future this will never happen again." He disclosed a legal compliance plan developed in conjunction with a team of lawyers and accountants, to which all Spinka institutions were bound to follow, and which he offered to share freely with all other synagogues, schools and institutions.
According to AUSA Dan O'Brien Robert A. Kasirer operated as the primary informant to the government in order to exonerate his own tax fraud. Kasirer engaged in conversations with Spinka leaders included gabbai Moshe Zigelman. Approximately 99% of Spinka's income was kicked back out. Spinka in $27 million 2006.
Search warrants played an important part in pulling hundreds of boxes from five to six locations in LA and Brooklyn utilizing 50-60 FBI agents. Computers were also confiscated. Kasirer was asked and agreed to use a video camera the size of a shirt button to document receiving $50,000 in cash at jewelry shops in East LA. Bank Mizrah in Israel played an important part in the scheme, Joseph Roth of the bank set up phony corporations on two occasions for Kasirer in the Caribbean and Cayman Islands respectively to serve as hubs to monitor the laundering of money in and out of the U.S.
The defendants in the case: gabbai Moshe Zigelman (max 18 months), Grand Spinka Rebbe Weisz (two years), Roth (sentenced to 14 months), Tel Aviv lawyer Jacob Kantor (fugitive at large) and four money remitters (who each received four months). Spinka entities payed $2 million in fines and forfeited $4 million. Kasirer will probably be sentenced in the spring of 2013. The scheme was robbing the US treasury year after year of millions.
Read more about this topic: Spinka (Hasidic Dynasty)
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