Solomon Dwek's mug shot
Hasidic Man Pleads Guilty To Using Charity As Illegal Bank To Launder Money
Shmarya Rosenberg • FailedMessiah.com
A haredi man who operated a Klausneberg-Sanz hasidic charity as an illegal bank used by depositors to launder money, evade taxes and commit other crimes has pleaded guilty, NJ.com reported.
Thirty-three year old Moshe "David" Schwartz admitted that he ran the Gemach Shefa Chaim (GSC) as a bank, accepting millions of dollars in illegal deposits – including nearly $1 million of his own money – and hid those deposits from state and federal regulators.
Schwartz admitted having more than 350 client accounts as of July 2009.
He also admitted giving fraudulent information to his tax preparer and reporting his 2007 income as $24,475 when it was actually approximately $208,845. Schwartz admitted that caused a $74,889 tax loss for the government.
Schwartz could get as much as five years in prison for the banking offense and as much as three years in prison on a related tax offense, along with a fine of up to $250,000 for each charge. He is scheduled to be sentenced on July 30, 2014.
Gemach Shefa Chaim was supposed to provide interest-free loans to members of the Klausenberg-Sanz community in Union City, New Jersey.
Schwartz and Gemach Shefa Chaim were caught in “Operation Bid Rig III” corruption sting, also known as the Solomon Dwek affair, that also snared more than 40 public officials, eight haredi rabbis, and others.
Many of the rabbis pleaded guilty to money laundering.
One was snared in an organ trafficking scheme.
All Solomon Dwek Scandal Posts.
[Hat Tip: Seymour.]