Ex-Chicago rabbi indicted in tax-fraud case arrested in Israel
Ring allegedly used stolen IDs of inmates to file for refunds
By Jeff Coen | Chicago Tribune
A former Chicago rabbi and nine of his family members and associates have been indicted in connection with a tax-fraud ring that allegedly used the stolen identities of thousands of federal prisoners to file bogus tax returns.
Marvin Berkowitz, 62, who fled to Israel to avoid a tax fraud case in 2003, was arrested in Jerusalem on Sunday night, federal authorities said. Berkowitz allegedly recruited members of the conspiracy to travel to federal courthouses to gather information about prisoners to use in the scheme.
The ring, broken up by the IRS Criminal Investigation Division, submitted fraudulent documents using the stolen identities seeking $35 million, and caused $4 million in refunds to be issued to bank accounts it controlled, authorities said. Berkowitz then allegedly directed $800,000 to be paid to his family members.
It was unclear when Berkowitz might be returned to Chicago, where in the late 1980s he also was convicted of stealing documents from the U.S. attorney's office in yet another fraud case. He eventually was sentenced to 5 years in prison for that crime.
Yair Berkowitz, 26, of Chicago, the alleged leader's son, appeared at the Dirksen U.S. Courthouse on Monday, along with Eric Berkowitz, 33, of Chicago, Marvin Berkowitz's son-in-law. Both pleaded not guilty to conspiracy and fraud charges and were being held pending a detention hearing Wednesday.
Prosecutors said there was a serious risk that both could flee to Israel, compounded by the ability of Marvin Berkowitz to wire money.
Berkowitz fled to Israel in 2003 to escape indictment on a previous fraud:
Posted by mforce on 09/23/2004 - 20:39
A Chicago woman who helped a former rabbi try to bilk the Internal Revenue Service out of nearly $500,000 by filing income tax refunds in the names of deceased people pleaded guilty Wednesday to federal charges, the Daily Southtown in Chicago reported.
Therese Daniels admitted in court that she was paid $350 a week to prepare taxes in 1999 and 2000 on behalf of former rabbi Marvin Berkowitz, who is now a fugitive. Authorities believe he is living in Israel, the Southtown reported, adding he was permanently banned by a federal judge from tax preparation work in 1984.
Berkowitz, Daniels and four others were charged last year in the scheme. Authorities believe they filed more than 1,000 false returns seeking up to $5 million in IRS refunds, successfully receiving $2 million, the Southtown reported.
Using published obituaries and public records to obtain Social Security numbers the group used the information to get old tax returns from the IRS and then forged signatures on new, phony forms.
The plea agreement showed that Daniels helped submit phony tax returns claiming a total in $483,000 in refunds; the IRS refunded about $141,000 of that amount. Many of the refund checks were sent by the IRS to homes of Daniels' friends and family members in Harvey, Blue Island and Joliet and were then cashed by Berkowitz at currency exchanges, the Southtown reported.
She has been convicted of forgery twice in the past and has spent nine months in prison and has been convicted on credit card fraud, spending two years prison after violating her probation in that case, records show, the Southtown reported. She faces up to 10 years in prison.
But that isn't the only crime Rabbi Berkowitz committed. He was convicted in 1988 of two counts of obstruction of justice and one count of stealing government property.
Berkowitz's brother is apparently married into high haredi circles, to a family closely linked to the rabbinical board of Agudath Israel of America. Can anyone confirm this?