Above: Rabbi Yaakov Weingarten
The AG's press release:
A.G. Schneiderman Announces Criminal Conviction And $500k Civil Judgment Against NYC Fundraiser Who Solicted Donations For Fraudulent Charities In The Name Of Israeli Causes
Yaakov Weingarten Convicted Of Felony Tax Fraud; Required To Pay $90K To State, Return $360K To Legitimate Charities, Pay $162K In Civil Fines And Penalties; Permanently Barred From Charitable Fundraising
Schneiderman: My Office Will Hold Accountable Those Who Abuse Donors’ Generosity
NEW YORK – Attorney General Eric T. Schneiderman today announced the felony tax fraud conviction of Yaakov Weingarten and a more than $520,000 civil judgment lodged against him and his wife for activities related to the Brooklyn-based charitable fundraising ring he operated, which solicited donations from thousands of donors for phony not-for-profit organizations. The judgment, signed by Kings County Supreme Court Justice Carolyn Demarest on Wednesday, resolves a civil lawsuit filed by Attorney General Schneiderman’s office last year against Weingarten and his wife, Rivka, who are alleged to have been the biggest beneficiaries of the scheme and are, under the judgment, required to pay $522,315. Approximately $360,000 of those funds will go to two Israeli charitable organizations that carry out genuine programs similar to the causes for which Weingarten’s fraudulent solicitations raised donations from the public.
The judgment also permanently bars Weingarten and his associates, Simon Weiss and David Yifat, from any fundraising activities or other charitable activities in the State of New York.
“We are committed to fighting to protect everyday New Yorkers, particularly those who want to use some of their hard-earned money to support charitable causes, because there has to be one set of rules for everyone,” Attorney General Schneiderman said. “My office will use all the tools at our disposal to protect New Yorkers from unscrupulous fundraisers for sham charities.”
Weingarten pleaded guilty May 19 in Brooklyn Supreme Court before Judge Matthew A. Sciarrino to Criminal Tax Fraud in the Third Degree, a Class D felony. He paid $90,685 in restitution to the state Department of Taxation and Finance, and on June 23, he was sentenced to five years’ probation. As a condition of his felony probation, Weingarten is forbidden from engaging in any charitable fundraising activities for five years.
New York State Commissioner of Taxation and Finance Thomas H. Mattox said, “The defendant not only stole donations for charitable organizations, he also committed criminal tax fraud by failing to report income on his tax returns. Tax theft is a crime against all New Yorkers, and we will continue to work with the Attorney General and other levels of law enforcement to investigate and prosecute such perpetrators.”
In June 2013, the Attorney General’s Charities Bureau filed a civil lawsuit and obtained a temporary restraining order closing Weingarten’s fundraising operation, which Weingarten, together with associates Weiss and Yifat, ran out of a Brooklyn storefront at 1493 Coney Island Avenue. According to the suit, Weingarten, Weiss and Yifat raised donations for 19 sham charities from Jewish donors throughout North America, ostensibly for Israeli charitable causes such as emergency medical services and programs for sick children, terror attack survivors, cancer victims, and the poor. Large amounts of the money raised -- an estimated $2 million -- was then withdrawn from charity bank accounts. Some of that money was used to pay workers operating Weingarten’s Brooklyn telemarketing boiler room. Other funds were used by Weingarten and his family to pay for personal expenses, such as mortgages, dentist bills, car loans, and home improvements. The complaint also detailed gross mismanagement of charitable assets by Weingarten, including extensive mixing of charitable and personal funds and of funds raised for one charitable cause with those raised for another, which is barred by law. More information on the lawsuit is available here.
Under the order, Weiss, 29, and Yifat, 68, are also permanently barred from charitable fundraising in New York.
As part of his guilty plea, Weingarten, 53, admitted that between approximately June 2007 and June 2012, he solicited charitable donations for multiple entities, many of which did not exist, and obtained donations from thousands of donors. He further admitted that from January 2009 through December 2011, he paid over $270,000 in personal expenses from bank accounts set up in the names of the purported charities, including mortgages on his two homes, various home improvements, and Cablevision and Con Edison bills. Weingarten admitted that with intent to evade New York State taxes, he failed to report this money as income on his 2009, 2010 and 2011 tax returns.
On Wednesday, Justice Carolyn Demarest signed the Attorney General’s civil judgment. It permanently shuts down Weingarten’s operation and requires Weingarten and his wife, also 53, to pay a total of $522,315. Of that, $360,000 will go to the United Jewish Appeal/Federation of New York, to be distributed equally to Schneider Children’s Medical Center of Israel, the preeminent pediatric hospital in Israel, and United Hatzalah of Israel, a leading Israeli volunteer emergency medical services organization. The remaining portion of the judgment payment is for penalties and costs to New York State.
The judgment also requires the dissolution of 11 incorporated entities Mr. Weingarten used to implement his fraudulent fundraising scheme. These entities include four “religious corporations” that on paper purported to be synagogues but in reality were mere shells that helped hide much of his activity behind a cloak of religious freedom. Weingarten also made up names of eight other entities, which were never incorporated, and used those names in his scheme. The 19 Brooklyn entities are permanently barred from operating under the order. They are: Hatzalah Rescue of Israel, Inc.; Shearim, Inc.; Bnei Torah, Inc.; Chesed L’Yisrael V’Chasdei Yosef, Inc.; Yad L’Shabbat, Inc.; Hatzalah Shomron, Inc.; Pulse Foundation, Inc.; Agudath Chesed Bikur Cholim Israel, Inc.; Kupat Reb Meir Baal Haness Bnei Torah Eretz Yisrael, Inc.; Congregation Yad L’Shabbat, Inc.; Shearim Hayad L’Torah Center for Hatzalah L’Shabbat and Chesed L’Yisrael, Inc.; Israel Emergency Center; Magen Israel; Hayad Victim Assistance Fund; Lmaan Hatorah; Our Children; Zaka Israel; Yaldel Simcha Yisrael; and Yad Yisrael.
The Attorney General thanks the New York State Department of Taxation and Finance for its assistance in this matter.
Attorney General Investigators who worked on these cases are Luis Carter, Bradford Farrell, Edward Ortiz, Kenneth Morgan, Elsa Rojas, Sixto Santiago, Andrew Scala, Vito Spano and Sal Ventola. The Investigations Bureau is led by Chief Dominick Zarrella.
The civil matter was handled by Assistant Attorney General Michael Torrisi of the Attorney General’s Charities Bureau and Senior Enforcement Counsel David Nachman of the Executive Division, together with Charities Bureau Associate Accountant Joseph Stoffel and Research Analyst Liam Arbetman. The Charities Bureau is led by Bureau Chief James Sheehan, and the Executive Deputy Attorney General for Social Justice is Alvin Bragg.
The criminal matter was handled by Assistant Attorney General Joseph G. D’Arrigo of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Chief Gary T. Fishman and Deputy Chief Stephanie Swenton. The Criminal Enforcement and Financial Crimes Bureau is part of the Criminal Justice Division, led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.
[Hat Tip: The Lion.]