Many of you already know Naftali Tzvi Weisz, the Spinka Rebbe of Borough Park was arrested earlier today along with his gabbai and a few others on federal money laundering charges. The holy rebbe raised funds from wealthy donors and kicked back large chunks of their donations – as high as 95% in at least one case – enabling these 'ba'alei tzedaka' to cheat the government out of
tens of thousands millions of dollars in taxes. The scam laundered money in LA's diamond district and by using Israeli banks with American branches.
This is the same type of scam allegedly run by the head of Chabad-Lubavitch in Israel, Rabbi Yosef Yitzchok Ahranow, and it is the same type of scam allegedly run by several other haredi rabbis and charities in the US and abroad.
I'd guess other haredi charities in Borough Park, Williamsburg, Crown Heights, Monsey, Spring Valley, Kiryas Joel and Lakewood could be busted on similar charges. The same for Bnei Brak and Jerusalem.
Will it happen?
Let's hope so.
[Hat Tips: Archie Bunker and janitor.]
UPDATE 12-20-07 – The New York Times ads:
…In some cases, the contributions were returned as cash payments through what the government called “an underground money transfer network” involving businesses in and around Los Angeles’s jewelry district, the government said.
Three men in California were charged with taking part in the money transfer network: Yaacov Zeivald, 43, a professional scribe from Valley Village, Calif.; Yosef N. Naiman, 55, a tour company owner from Los Angeles; and Alan Friedman, 43, a businessman, also from Los Angeles. A fourth man, Moshe A. Lazar, 60, a diamond dealer, was charged in the scheme as well and was believed to be in Israel, the government said.
The contributions were repaid by a sophisticated series of wire transfers from businesses controlled by the Spinka sect to secret accounts in Israel, the government said. The accounts were established with the help of an official at the Israeli bank, Joseph Roth, 66, of Tel Aviv, who was arrested in Los Angeles, and a Tel Aviv lawyer, Jacob Kantor, 71, who remained at large in Israel, the government said.
According to the indictment, Mr. Roth helped the contributors get loans from a Los Angeles branch of the bank so their money would be available to them in the United States. The contributors could also hire officials of the Spinka sect to repatriate their money for them, albeit for a fee, the government said.
Earlier this year, the indictment said, Rabbi Weisz and Mr. Zigelman determined they had taken in some $8.7 million in contributions solicited by Mr. Zigelman alone. Of that, they held on to almost $750,000, the indictment said.…
Five Spinka charitable organizations in Brooklyn — identified in the indictment as Yeshiva Imrei Yosef, Yeshivath Spinka, the Central Rabbinical Seminary, Machne Sva Rotzohn and Mesivta Imrei Yosef Spinka — were named as defendants in the case.