Spinka financial controversy

The Spinka financial controversy is a case in which five Spinka charitable organisations under the auspices of Grand Rabbi Naftali Tzvi Weisz, the "Spinka Rebbe" of Boro Park, as well as Weisz himself, his personal assistant, and five others were charged with various counts of tax fraud and money laundering. [ [http://www.cjp.org/page.html?ArticleID=163843 "Jewish leaders arrested on fraud charges", UPI via COMTEXT, December 20, 2007] ] Their indictment alleges that the five charities were used to launder money and to avoid payment of tax on taxable income by issuing fraudulent receipts for bogus charitable contributions, and charging fees for transfers of funds. [ [http://www.jewishjournal.com/home/preview.php?id=18684 "Local Orthodox community in shock after arrest of Spinka rabbi", Amy Klein, Jewish Journal of Greater Los Angeles, 2007-12-21] ] [ [http://www.mercurynews.com/ci_7760897?source=most_emailed&nclick_check=1 "Rabbi indicted in tax fraud and money laundering scheme in LA", San Jose Mercury News, 12/19/2007] ] [ [http://www.brooklyneagle.com/categories/category.php?category_id=7&id=17381 "Weisz Routed ‘Donations’ To Calif. Businesses and Israeli Banks, Say Feds", Charles Maldonado, Brooklyn Daily Eagle, December 19, 2007] ] [http://losangeles.fbi.gov/dojpressrel/pressrel07/la121907usa.htm "Brooklyn Rabbi and several Associated Charged in sophisticated tax fraud and money laundering scheme", Press Release, The United States Attorney's Office, Central District of California, December 19, 2007] ] Among those charged are four men from Los Angeles, California and two from Tel Aviv. These include a diamond merchant, a business person and an attorney. The five Spinka charitable organizations are Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn, and Mesivta Imrei Yosef Spinka, all based in Brooklyn.

The accusations include receiving up to eight-figure sums in contributions to Spinka charities while secretly promising to refund up to 95% of contributors' donations, allowing contributors to then illegally claim tax deductions on money they in fact kept. [http://www.latimes.com/news/local/la-me-rabbi20dec20,0,4164354.story?coll=la-home-center "Jewish sect leader held on charges of money laundering", Tiffany Hsu, Los Angeles Times, December 20, 2007] ] The scheme allegedly saved the participating donors millions of dollars in federal income taxes. [http://www.jta.org/cgi-bin/iowa/breaking/106023.html "Spinka rabbi arrested for tax fraud", JTA, December 20, 2007] ] Over the course of ten years at least $8.7 million in donations were involved, out of which the charities kept nearly $750,000. The rest was refunded to donors who allegedly claimed bogus donations on their income tax returns.

The case was broken apart with the help of a secret cooperating witness, a Los Angeles businessman who had contributed $1.7 million to the scheme, after he agreed to turn state's evidence and secretly record his former colleagues. [http://www.nytimes.com/2007/12/20/nyregion/20rabbis.html?ref=nyregion "Hasidic Rabbi and Assistant Are Arrested in Tax Scheme", Alan Feuer, New York Times, December 20, 2007] ] [http://www.vosizneias.com/2007/12/borough-park-brooklyn-ny-bail-in-spinka.html "Bail In Spinka Rabbi Case Set At 3.5 Million" VIN News Service, December 22, 2007] ]

In their January 11, 2008 edition the "Jewish Journal of Greater Los Angeles" published a detailed report on the case alongside a number of subsidiary articles. [ [http://www.laobserved.com/archive/2008/01/friday_desk_clearing_4.php "Friday desk cleaning", LA Observed, January 11, 2008] ] The article was the papers cover story and was written by the paper's religion editor Amy Klein. The paper revealed from court documents that the FBI informant was Robert A. Kasirer a prominent LA businessman who is Jewish. [http://www.jewishjournal.com/home/preview.php?id=18767 "The Spinka money trail and the informant who brought them down", Amy Klein, Jewish Journal of Greater Los Angeles, January 11, 2008] ] Kasirer had been wiretapped by the FBI in conversation with Spinka officials negotiating over the percentage kick-back to be kept. According to an affidavit cited, Kasirer turned states evidence after being confronted with the evidence. The scam according to taped conversation between Kasirer and the Spinka Rebbe revealed in court, was instigated by his Kasirer's father, a major LA Jewish philanthropist. The article also quoted experts on the Orthodox Jewish world, with Joel Cohen arguing that:Some have suggested that the informant identified as Kasirer should be termed a "moser" - an informant. The Rabbinical Council of California spokesman commented that the body has discussed the issue but declined to take a view. [Samuel Heilman] , of City University of New York, commented on the controversy in "The Forward" "There is a great temptation among these rabbis, who come from a culture that often views the ‘government’ as in the hands of enemies, to believe that for ‘higher’ motives is acceptable, in fact, often their temptations are driven by more venal and selfish aims than they might acknowledge." [http://www.forward.com/articles/12347/ "Hasidic Leaders Arrested", Marc Perelman, The Forward, December 26, 2007] ] "

Weisz and Zigelman appeared in court on December 31, 2007. They spent some of the time studying Hebrew books and reciting psalms.

ee also

* Charity fraud

References

External links

* [http://www.nytimes.com/2007/12/20/nyregion/20rabbis.html?ref=nyregion Spinka Tax Scheme]
* [http://www.jta.org/cgi-bin/iowa/breaking/106023.html Spinka rabbi arrested for tax fraud]