This is insane
If this is how the leadership of different religious orginizations treats people
it is no wonder this country is in so much trouble
in the Catholic Church
By Mario Seiglie May 2002
Hasidic Rabbi and Assistant Are Arrested in Tax Scheme
By ALAN FEUER
Published: December 20, 2007
The rabbi, Naftali Tzi Weisz, 59, and the assistant, or gabbai, Moshe E. Zigelman, 60, were charged in a 37-count indictment returned on Tuesday in Los Angeles that named them as the masterminds of the money-laundering scheme, through which the authorities say they reaped more than $750,000 in profits. They were arrested by federal agents while on a fund-raising trip. Six other men in California and in Israel were also charged in the case.
Under the scheme, officials said, Rabbi Weisz and Mr. Zigelman spent more than a decade soliciting contributions for Spinka charities by promising to secretly refund as much as 95 percent of the money to the donors. The donors could then claim tax deductions on the full amount while paying as little as 5 percent, officials said.
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.
The case was broken, in part, with the help of a secret cooperating witness, a Los Angeles businessman identified in the indictment only as R. K. In one year alone, before he turned state’s evidence and agreed to record his former colleagues secretly, R. K. contributed about $1.7 million to the Spinka sect’s scheme.
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. Calls to them were either
not answered or were answered by men who did not wish to discuss the case.
An Orthodox rabbi who runs a respected Jewish day school in Brooklyn was charged on Thursday with trying to extort $4 million from a Connecticut hedge fund.
The rabbi, Milton Balkany, the dean of the Bais Yaakov day school in Borough Park, is an influential fund-raiser and community leader known for his access to a wide circle of politicians. Mr. Balkany was accused, among other things, of trying to use his influence to extort the fund.
He was charged with wire fraud, extortion, blackmail and making false statements. The wire fraud count alone carries a sentence of up to 20 years.
In a criminal complaint filed in federal court in Manhattan, prosecutors said that Mr. Balkany, 63, had recently been serving as a “spiritual adviser” to a federal inmate who told him that a Connecticut hedge fund had used inside information to profit from a number of stock trades.
The hedge fund was not named in the complaint, but prosecutors said that Mr. Balkany went to lawyers for the fund and told them that unless they handed over $4 million — $2 million of which would go to Bais Yaakov — he would instruct the inmate to tell the authorities about the insider trades.
According to the complaint, Mr. Balkany told the lawyers that government officials were eager to speak with the inmate — something prosecutors said was a lie. But Mr. Balkany called the United States attorney’s office in Manhattan in January and encouraged officials to speak with the inmate, prosecutors said.
On Thursday, Mr. Balkany received two checks totaling $3.25 million, the complaint said, adding that the rabbi told a hedge fund representative that the inmate would not discuss the fund with the government.
He was arrested later that afternoon. His lawyer, Benjamin Brafman, said late Thursday that he could not comment on the charges because he had not seen the complaint. Mr. Balkany was released on bail, he said.
NEWARK (Reuters) - Dozens of New Jersey politicians, officials and prominent rabbis were arrested on Thursday in a sweeping federal probe that uncovered political corruption, human organ sales and money laundering from New York to Israel, officials said.
The 10-year investigation, dubbed "Operation Bid Rig," exposed influence-peddling and bribe-taking among a network of public officials and a separate multimillion dollar money-laundering ring that funneled funds through charities operated by local rabbis, said the U.S. Attorney's office in Newark, New Jersey.
The cast of the 44 arrested featured Hoboken, New Jersey, Mayor Peter Cammarano, who took office three weeks ago in the industrial city visible across the Hudson River from New York.
Others accused were mayors of nearby Secaucus and Ridgefield, state Assemblymen, a deputy mayor, city council members, housing, planning and zoning officials, building inspectors and political candidates.
"New Jersey's corruption problem is one of the worst, if not the worst, in the nation," said Ed Kahrer, assistant special agent in charge of the FBI's white collar crime and public corruption program in New Jersey, who has worked on the investigation since it began in July 1999.
"It has become ingrained in New Jersey's political culture," he said, calling corruption "a cancer."
Central to the investigation was an informant who was charged with bank fraud in 2006 and posed undercover as a real estate developer and owner of a tile business who paid off officials to win project approval and public contracts in northern New Jersey, according to documents in the case.
The public officials stand accused of taking bribes for pledging their help getting permits and projects prioritized and approved or steering contracts to the witness.
"CULTURE OF CORRUPTION"
In scenes that could have been lifted from the hit TV series "The Sopranos," about New Jersey organized crime, they met in diners, parking lots, even bathrooms, officials said.
"The politicians willingly put themselves up for sale," said Acting U.S. Attorney Ralph Marra. "The victims are the average citizens and the honest business people in this state. They don't have a chance in this culture of corruption."
The public corruption uncovered by the informant led him to the separate money-laundering network by rabbis who operated between Brooklyn, Deal, New Jersey, and Israel, authorities said. They laundered some $3 million for the undercover witness between June 2007 and July 2009, authorities said.
"These complaints paint a disgraceful picture of religious leaders heading money laundering crews acting as crime bosses," Marra said. "They used purported charities, entities supposed set up to do good works as vehicles for laundering millions of dollars in illicit funds."
HUMAN KIDNEY SALES
Rabbis accused of money-laundering were Saul Kassin, chief rabbi of a large Syrian Jewish synagogue in Brooklyn; Eliahu Ben Haim, principal rabbi of a synagogue in Deal; Edmund Nahum, principal rabbi of another synagogue in Deal; and Mordchai Fish, a rabbi at a synagogue in Brooklyn.
The probe also uncovered Levy Izhak Rosenbaum of Brooklyn, who is accused of conspiring to broker the sale of a human kidney for a transplant. According to the complaint, Rosenbaum said he had been brokering sale of kidneys for 10 years.
"His business was to entice vulnerable people to give up a kidney for $10,000 which he would turn around and sell for $160,000," said Marra.
Several of the public officials were accused of taking bribes of just $10,000, authorities said. Cammarano, at 31 the youngest ever mayor of Hoboken, was charged with taking $25,000 in bribes, including $10,000 last Thursday.
Most of those accused were arrested in a sweep across New Jersey by more than 300 federal agents early on Thursday and were slated to appear in court in Newark throughout the day.
The first 12 of the defendants, including Cammarano, appeared shackled before U.S. Magistrate Judge Madeline Cox Arleo. Cammarano rocked back and forth in his chair but betrayed no emotion.
They were granted bail ranging from $100,000 to $500,000.
(Additional reporting by Michelle Nichols and Ellen Wulfhorst; Writing by Ellen Wulfhorst; Editing by Doina Chiacu)
WASHINGTON (JTA) -- Several rabbis were arrested as part of a public corruption and international money-laundering investigation in New Jersey.
According to reports, among the 44 people arrested Thursday morning by the FBI along with the rabbis were the mayors of three New Jersey towns, a deputy mayor and a state assemblyman. They were to appear in federal court in Newark later in the day.
The money-laundering suspects were accused of moving “at least tens of millions of dollars through charitable, nonprofit entities controlled by rabbis in New York and New Jersey,” according to a release by acting U.S. Attorney Ralph Marra.
Prosecutors said they worked with an informant who had been charged with bank fraud in May 2006, Bloomberg.com said. Investigators obtained hundreds of hours of audio and video recordings, according to prosecutors.
The rabbis arrested were religious leaders from Syrian Jewish neighborhoods in Deal and Elberon, N.J., as well as Brooklyn, N.Y. The Asbury Park Press reported that the investigation involved the Deal Yeshiva, a Sephardic institution that has a boys' division in Ocean Township and a girls' school in West Long Branch.
The arrests reportedly are the result of a two-year probe by the Federal Bureau of Investigation and the Internal Revenue Service that began with an investigation of money transfers by members of the Syrian enclaves in Deal and Brooklyn, two tight-knit and wealthy communities.
The Monmouth County Prosecutor's Office and the IRS removed at least three boxes from the Deal Yeshiva as students were arriving at school Thursday, The Star-Ledger reported, as well as several boxes from the Ohel Yaacob synagogue in the same town.
The charged rabbis include Rabbi Saul Kassin, 87, of the Sharee Zion synagogue in Brooklyn, N.Y.; Eliahu Ben Haim, 58, the principal rabbi of Congregation Ohel Yaacob in Deal; Edmond Nahum, 56, of the Deal Synagogue; Mordchai Fish, 56, of Congregation Sheves Achim in Brooklyn; and Lavel Schwartz, 57, Fish’s brother. They were charged with money laundering.
Kassin is accused of laundering more than $200,000 through the informant from June 2007 through December 2008, according to prosecutors. Fish, Schwartz and two other defendants used a charitable, tax-exempt organization called BCG, which was associated with Fish’s synagogue, to launder money, according to the FBI.
The mayors of Hoboken, Ridgefield and Secaucus, the deputy mayor of Jersey City and an assemblyman from Ocean Township were caught in the operation.
Also charged is Levy-Izhak Rosenbaum, 58, of Brooklyn, who was accused of conspiring with others to acquire and trade human organs for use in transplantation. In one case noted in the complaint, Rosenbaum said it would cost $150,000 -- half up front. Rosenbaum said some of the money would go to the donor and some to doctors in Israel, according to the complaint.
identified the cooperating witness as Solomon Dwek, a real estate developer in
Monmouth County, N.J. who was charged in 2006 with scheming to defraud PNC Bank
out of $50 million, according to a person familiar with the matter and court
records. Dwek was never indicted; he has received 17 extensions to continue the
period in which his case had to be presented to a federal grand jury.
New Jersey has never been short of corruption scandals, but the one that unfolded yesterday was surprising even by the standards of the state that inspired "The Sopranos."
David Bergeland, The Bergen Record/ Associated Press
Federal agents swept across New Jersey and New York on Thursday, charging 44 people -- including mayors, rabbis and even one alleged trafficker in human kidneys -- in a decadelong investigation into public corruption and international money laundering.
The key to the investigation: a real-estate developer who became an informant after being arrested on bank-fraud charges in 2006, according to a person familiar with the case. The developer, Solomon Dwek, wore a wire for the Federal Bureau of Investigation while offering to bribe New Jersey mayors and other public officials, that person said.
A lawyer for Mr. Dwek didn't respond to requests for comment.
While the state has a long history of dirty politics -- in Newark alone, three ex-mayors have been convicted of crimes unrelated to the latest sweep -- the scale of the allegations shocked veterans of New Jersey's political crises.
"This is not only a black eye, but this fans more
cynicism," said Gene Grabowski, a crisis manager who has represented New
Jersey clients in graft probes. "It validates this idea that New Jersey is
a setting for 'The Sopranos.'"
Developer Became Secret Witness
Law Blog: Highlights, text of complaints
Video: FBI Arrests N.J. Mayors, Rabbis
Q&A: New Jersey's History of Corruption
Sortable table: Arrests, charges, more
Court documents read like a pulp crime novel. At one point, Mr. Dwek (described as a "cooperating witness" in criminal complaints) is quoted saying to an alleged money-launderer: "I have at least $100,000 a month coming from money I 'schnookied' from banks for bad loans."
Another time, Mr. Dwek gave one of the alleged co-conspirators a box of Apple Jacks cereal stuffed with $97,000 cash, the documents say.
The arrests in the public-corruption portion of the probe included the Democratic mayors of Hoboken and Secaucus, Peter Cammarano III and Dennis Elwell; Republican state Assemblyman Daniel Van Pelt; and Democrat Leona Beldini, the deputy mayor of Jersey City.
A woman who picked up the phone at Mr. Van Pelt's office said, "Mr. Van Pelt was arrested today and is out of the office." His lawyer declined to comment.
Mr. Cammarano's lawyer said he "intends to plead innocent because he is innocent."
After her court appearance, Ms. Beldini said she didn't violate taxpayers' trust and declined to comment further while leaving the courthouse. Mr. Elwell and his lawyer declined to comment.Arrests on the investigation's money-laundering side include several rabbis in New York and New Jersey, said Ralph Marra Jr., acting U.S. attorney for New Jersey. The arrestees appeared in federal court in New Jersey Thursday afternoon.
Corruption among the politicians was "a way of life," Mr. Marra said. "They existed in an ethics-free zone."
The probe includes a bizarre sideshow: the alleged trafficking of human kidneys, a lucrative, illegal industry and not one that's typically showcased alongside political shenanigans.
In the course of the investigation last year, Mr. Dwek came into contact with an alleged organ trafficker, Levy Izhak Rosenbaum, and told him Mr. Dwek's uncle needed a new kidney, according to court papers. The two men discussed how Mr. Dwek would pay a $160,000 fee to buy a kidney from a donor in Israel, documents show. According to the complaint, Mr. Rosenbaum described himself as a "matchmaker."
Mr. Rosenbaum couldn't be reached for comment. A person who answered the phone at his residence declined to comment.
This federal investigation grew out of two previous cases and dates back to 1999, according to the FBI. It culminated at 6 a.m. Thursday with more than 200 FBI and Internal Revenue Service agents making arrests and executing search warrants throughout the state, said Weysan Dun, special agent in charge of the FBI's Newark office.
In all, 29 people were caught up in the public-corruption part of the probe. Fifteen were implicated in the investigation into money laundering, including Mr. Rosenbaum, who was charged with conspiring to broker the sale of a kidney.
Court documents quote a number of incriminating wiretap recordings involving New Jersey politicians -- some prominent names, others known only in their small communities. For example, according to court documents, on April 27, FBI agents caught an incoming call from former Jersey City council candidate Guy Catrillo to a consultant's cellphone. The consultant asked Mr. Catrillo: "Did you get the money from [Mr. Dwek] when we saw him the other day?"
Mr. Catrillo replied: "Yeah, I took care of that. Yeah."
Mr. Catrillo's office didn't answer the phone Thursday.
Mr. Dwek, a 36-year-old religious-school head and philanthropist from Monmouth County, N.J., was at the heart of the investigation. He began his career as a small-time real-estate developer whose investors included friends and relatives in the Syrian Jewish community. Three years ago he was charged with defrauding PNC Bank of $25 million and remained free on a $10 million bond.
In 2007, Mr. Dwek began working for the FBI, wearing a wire and being trailed by FBI agents who videotaped his encounters with targets of their probe, according to someone familiar with the matter and information in the complaints. Prosecutors said the alleged bribe-taking was often tied to election fund-raising efforts. Other recipients took cash for direct personal use, prosecutors allege.
In the case involving Mr. Cammarano, who became Hoboken mayor on July 1, he was charged with accepting $25,000 in cash bribes from Mr. Dwek in return for promising support for zoning changes for a high-rise Mr. Dwek said he wanted to build. Mr. Cammarano is so new to the mayor's job that an events poster outside his office still lists the name of the previous mayor, David Roberts, on it.
The alleged bribes occurred during the 32-year-old Mr. Cammarano's mayoral campaign earlier this year, according to the FBI's complaint.
According to the complaint, Mr. Cammarano assured Mr. Dwek, that "[y]ou can put your faith in me" and that "I promise you...you're gonna be, you're gonna be treated like a friend."
Supporters of the mayor expressed dismay at the charges. "This was a charismatic guy who we thought could get us past all this stuff," said Jay Rose, a 27-year resident of Hoboken who voted for Mr. Cammarano. "It looks like we're back to square one."
In the FBI money-laundering probe, Mr. Dwek represented himself as someone who engaged in various illegal businesses, including bank fraud and counterfeiting of women's handbags. "Business is very good. Prada, Gucci, boom, boom, boom," Mr. Dwek boasted at one point, according to court papers.
The alleged money-laundering operations -- most of them run by rabbis as religious charity organizations -- laundered about $3 million for Mr. Dwek in his capacity as a cooperating witness since June 2007, according to the court documents and a person familiar with the matter. Mr. Dwek likely will receive credit from federal prosecutors for his cooperation.
The prosecutors allege that the rabbis used nonprofit organizations connected to their synagogues to launder money they understood came from criminal activity.
In 2007 Eliahu Ben Haim, principal rabbi of Congregation Ohel Yaacob, a synagogue located in the New Jersey shore community of Deal, accepted a $50,000 check from Mr. Dwek, which was drawn from an account held by a phony company set up by the FBI for Mr. Dwek to help facilitate the investigation, according to the complaint.
The check was made payable to one of Mr. Ben Haim's charitable organizations with the expectation that the proceeds would eventually be returned to Mr. Dwek, documents indicate; Mr. Ben Haim, who was charged with money laundering on Thursday, was to take a 10% fee.
A woman who answered the phone at Ohel Yaacob Congregation in Deal said, "I don't have anything to say." Michael O'Donnell, Mr. Ben Haim's lawyer, declined to comment.
The arrests place an added burden on Gov. Jon Corzine, a Democrat in his first term who is running for re-election this year. Mr. Corzine ran four years ago promising to quash corruption. "The scale of corruption we're seeing as this unfolds is simply outrageous and cannot be tolerated," he said in a statement.
In Hoboken, a city of just less than 40,000, city-clerk employees at the municipal building huddled around a small television to watch the news conference announcing the charges.
Some residents there said they weren't so surprised. "It happens everywhere in New Jersey," said James Goggin, a Hoboken resident. "I'll tell you one thing -- it never gets boring here. But sometimes I wish it would."
—Chad Bray, Robert Copeland, Chris Herring, Lucette Lagnado, Barbara Martinez and Steven Russolillo contributed to this report.
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