900 Transfers

Leader Of Hasidic Group Accused Of Taking Advantage Of Millions Of Dollars In Charitable Donations
A pillar in Brooklyn’s Orthodox Jewish community was arrested Wednesday, charged in an elaborate tax fraud and money-laundering scheme that allegedly took advantage of millions of dollars in charitable donations, CBS 2 has learned.

There was shock and disbelief in the tight-knit Hasidic community after news spread that Naftali Tzi Weisz, 59, was arrested in Los Angeles along with his executive assistant, identified as 60-year-old Moshe Zigelman.

Weisz heads a Spinka sect of Hasidic Jews — one of about 10 groups that trace their roots back to a town in Romania by that name — in the Borough Park section of Brooklyn. To put it in perspective, the Spinka sect is much smaller compared to larger sects such as the Satmar or Lubavitchers.

The 37-count indictment unveiled included charges of conspiracy, mail fraud and money laundering.

Authorities say Weisz helped solicit millions of dollars in contributions to five Spinka charitable groups in Brooklyn by promising to secretly refund up to 95 percent of the donations. That way, the contributors could falsely claim higher tax deductions, authorities said.

In some cases, donors received cash payments through an underground money transfer network involving business owners in Los Angeles’ jewelry district, prosecutors said. Contributors also were reimbursed through wire transfers from Spinka-controlled entities into accounts secretly held at a bank in Israel, prosecutors said.

The charitable organizations are based in Brooklyn.

Six of the seven charged in the case were taken into custody as federal agents conducted searches in Los Angeles and New York on Wednesday morning.

It was unclear whether the defendants had retained attorneys yet.

Duration : 0:1:29

(more…)

Technorati Tags: Arrested, Brooklyn, fraud, Hasidic, Jews, Naftali, Rabbi, Rebbe, scheme, Spinka, Tax, Tzi, Weiss, Weisz