Union City, NJ - Judge: Gmach Can't Get Back $500,000 Seized in FBI Corruption Sting |
|
| |
News Source: Law.com
Text Size
|
|
Union City, NJ - A Hasidic charity whose bank account was seized as part of last summer’s mass public corruption sting in New Jersey and New York can’t sue civilly to get its money back, a federal judge ruled.
U.S. Magistrate Judge Mark Falk held that Gmach Shefa Chaim had an adequate remedy in a criminal case in which the government is seeking forfeiture of the $508,925 in the account.
Falk called his ruling in Gmach Shefa Chaim v. U.S., 09-cv-5426, one of first impression in the 3rd Circuit.
The Gmach has not been indicted or accused of a crime but the government alleges the account was used by Moshe Altman, a Hudson County, N.J., real estate developer, to launder money.
The account was seized last July 23, the same day that Altman was arrested along with three mayors, two state assemblymen, five rabbis and others. He was indicted on Jan. 28 for allegedly depositing checks received from FBI informant Solomon Dwek into Gmach accounts in return for a 15 percent cut.
When Dwek told people in conversations secretly recorded by the FBI that he had “washing machines” to launder money, he was referring to the Gmach’s accounts, Falk noted in his opinion.
Dwek allegedly told Altman the checks were proceeds from bank fraud and counterfeit handbags, which he needed to conceal from the federal bankruptcy trustee so he could use at least some of it to bribe public officials.
Between February 2007 and July 2009, Altman allegedly took part in 15 separate laundering transactions, laundered $668,000 in checks, paying out $547,000 in cash and keeping $109,300.
The Gmach accounts at Valley National Bank in Union City, N.J., were allegedly used, as well as the accounts of another charity, Boyoner Gemilas Chesed, at JP Morgan Chase Bank in Newark, N.J., and Capital One Bank in Brooklyn.
The checks were made payable to one or the other charity and deposited into one of the accounts, from which cash was withdrawn and delivered to Dwek, according to the indictment in U.S. v. Altman, 10-cr-53. The 10 checks that were allegedly run through the Gmach’s accounts totaled $357,500.
On July 23, the day the government seized the $508,925 from one of Gmach’s accounts, a search of Altman’s office allegedly uncovered bundles of blank Gmach checks, plus hard drives and a laptop computer with the Gmach’s books and records.
On Oct. 23, the Gmach filed a district court action seeking return of the funds based on 18 U.S.C. 983, which gives the government 60 days to start a forfeiture action after it seizes property, and Federal Rule of Criminal Procedure 41(g), which allows a person aggrieved by the unlawful seizure of property to move for its return.
Falk ruled that the Gmach could not rely on the statute, which applies only to nonjudicial civil forfeitures of $500,000 or less and not to property seized pursuant to a search warrant.
By Feb. 19, when the motion was heard, Altman had been indicted, which the government argued mooted the Gmach’s Rule 41(g) action.
The Gmach contended none of the supposed money-laundering checks from Dwek were deposited into the account from which the money was seized.
The government’s response was that though the checks went into two other accounts, the money was then filtered into the seized account and commingled with the money there, subjecting all the funds to seizure and forfeiture.
Falk held the Gmach’s motion was not “legally moot” because it was filed before the indictment but if he let the case go forward, the result would be “two courts in the same district addressing the same seized property.”
The Gmach disputed that it had an adequate remedy in the criminal case, contending it would not be able to challenge forfeitability there, only ownership, and it would have to wait longer for the outcome.
Falk disagreed, finding no prejudice, because proof of ownership in the criminal case would get the Gmach’s money back, and delay unlikely, with Altman’s trial scheduled for April 5.
The Gmach’s lawyer, Marc Weinstein, of Hughes Hubbard & Reed in Jersey City, N.J., says “not a single check they allege in their indictment went into the account they seized” and an appeal is possible. The parties consented to have Falk handle the matter rather than the district judge, Jose Linares, so an appeal would be directly to the 3rd Circuit.
Assistant U.S. Attorney Bradley Harsch declines comment. Altman’s criminal defense lawyer, Jacob Laufer of New York, could not be reached.
Altman is also accused of arranging for the payment of a bribe to Jersey City housing inspector John Guarini, who was indicted as a co-conspirator. The money allegedly came from Dwek in exchange for help in securing zoning approval for planned development projects.
Shimon Haber of Brooklyn, also indicted as a co-conspirator, pleaded guilty Jan. 14.
The word “gmach” is derived from the Hebrew words gemilat chasadim, meaning “acts of kindness.” Common in Jewish communities, gmachs use funds contributed by the community to assist members in time of need, typically by extending interest-free loans.
More of today's headlines
“Austria - Vandals have defaced a former Nazi concentration camp with anti-Jewish and anti-Turkish graffiti, Austrian authorities said Friday. The spray-painted...” Austria - Former Nazi Camp Vandalized
Florida - Passengers To Undergo Hand Swabbing Test At Miami Airpot
Total39
Read Comments (39) — Post Yours »
1
Mar 05, 2010 at 12:29 PM Chaim Says:Report as Inappropriate
Nebech so much Yiddish gelt gone.
2
Mar 05, 2010 at 12:37 PM Anonymous Says:Report as Inappropriate
While this is a sad turn of events for the Gmach, it should be a lesson to all others out there, that money laundering is against the law, not just for Goyim but Yidden as well. No charitable organization should put themselves in a position of commiting a crime, white collar or otherwise. Taking a check for any amount and returning 75 or 80% in cash is illegal. We are not above the law. These are the types of things that give Yidden a bad name. Let's make sure that we do a Kiddush HaShem and not a Chilul HaShem in all that we do.
3
Mar 05, 2010 at 12:40 PM Anonymous Says:Report as Inappropriate
Do this to a few more of these scoundrels, and you will see them all begin to obey the laws of the land. They may not like being treated differently than they think they should, but they have brought this disgrace upon themselves! Now they will all begin to cry foul.. If they all would just act with morals, and in an ethical manner, this would not be happening.
4
Mar 05, 2010 at 12:54 PM Anonymous Says:Report as Inappropriate
Trial's begining April 5? That's shvii shel pesach!
5
Mar 05, 2010 at 01:25 PM Anonymous Says:Report as Inappropriate
Was Charlie Rangle's money seized as well?
Yeah, I mean the one who writes these laws but himself does not obey them. I am sure he acts in good faith when he writes them, maybe he over looked those millions he didn't pay taxes for.
I guess Dina Dmalchisa Dina only applies to Hassidic Jews.
6
Mar 05, 2010 at 01:26 PM ST Says:Report as Inappropriate
Does this have to do something with the Klosenburg Gemach in Williamsburg?
7
Mar 05, 2010 at 01:43 PM Yossi Says:Report as Inappropriate
A Gmach is a loan organization where people with money partner in the mitzveh of gemiles chasudim to the needy who need a short term loan interest free...If someone washed his money and the gmach has no way of knowing why that person withdraws his money. !!!! Its like a bank but interest free....If someone launders money thru Chase or Citibank or any other institution can the govt. freeze all their money.?...Why is this different?
8
Mar 05, 2010 at 01:44 PM Yossi Says:Report as Inappropriate
“ Do this to a few more of these scoundrels, and you will see them all begin to obey the laws of the land. They may not like being treated differently than they think they should, but they have brought this disgrace upon themselves! Now they will all begin to cry foul.. If they all would just act with morals, and in an ethical manner, this would not be happening. ”
I would like to see your tax return.....
9
Mar 05, 2010 at 01:56 PM Use Your Head Says:Report as Inappropriate
“ Nebech so much Yiddish gelt gone. ”
How about, "Nebach, so much fraud perpetrated by Jews". Does that bother you at all? Or is money more important than morals, laws, and honesty?
10
Mar 05, 2010 at 02:05 PM formally Says:Report as Inappropriate
“ Nebech so much Yiddish gelt gone. ”
true since maybe a good part of the money came from honest sources.
But lets not blame the government blame the money launderers and maybe ask Moshe Altman to reimburse the charity.
the question I have was this a real gemach or was it just a called a gemach to launder money
11
Mar 05, 2010 at 02:06 PM Anonymous Says:Report as Inappropriate
“ While this is a sad turn of events for the Gmach, it should be a lesson to all others out there, that money laundering is against the law, not just for Goyim but Yidden as well. No charitable organization should put themselves in a position of commiting a crime, white collar or otherwise. Taking a check for any amount and returning 75 or 80% in cash is illegal. We are not above the law. These are the types of things that give Yidden a bad name. Let's make sure that we do a Kiddush HaShem and not a Chilul HaShem in all that we do. ”
Tnks for ur reminder, u r so kind, what a gentlman u r!!
12
Mar 05, 2010 at 02:06 PM Use Your Head Says:Report as Inappropriate
“ Trial's begining April 5? That's shvii shel pesach! ”
Al tikray Pesach, elah "Pay-Sach".
13
Mar 05, 2010 at 02:09 PM Anonymous Says:Report as Inappropriate
The judges ruling does not say the gemach knew about the laundering or was involved in the alleged crime
14
Mar 05, 2010 at 02:09 PM Anonymous Says:Report as Inappropriate
Instead of using "washing machines" to launder money, they should now turn to "copy machines" to make more money!!
15
Mar 05, 2010 at 02:11 PM Golem Says:Report as Inappropriate
If you earn your money legally I don’t see any problem why you wouldn't deposit your hard earned money in a US bank which is currently insured up to $250,000 by the FDIC.
16
Mar 05, 2010 at 02:13 PM Anonymous Says:Report as Inappropriate
“ A Gmach is a loan organization where people with money partner in the mitzveh of gemiles chasudim to the needy who need a short term loan interest free...If someone washed his money and the gmach has no way of knowing why that person withdraws his money. !!!! Its like a bank but interest free....If someone launders money thru Chase or Citibank or any other institution can the govt. freeze all their money.?...Why is this different? ”
Because a gmach is a non-profit private institution governed not by general banking rules and regulations but by general civil and criminal law as well as IRS and Treasury rules and regulations. If a private commercial firm is involved in possible criminal activities, the DA will certaingly freeze or impound their assets.
17
Mar 05, 2010 at 02:20 PM Anonymous Says:Report as Inappropriate
“ Do this to a few more of these scoundrels, and you will see them all begin to obey the laws of the land. They may not like being treated differently than they think they should, but they have brought this disgrace upon themselves! Now they will all begin to cry foul.. If they all would just act with morals, and in an ethical manner, this would not be happening. ”
shame on you.... even non jews understand "innocent until proven guilty" but you a fellow jew dosent
18
Mar 05, 2010 at 02:33 PM Avi Says:Report as Inappropriate
“ A Gmach is a loan organization where people with money partner in the mitzveh of gemiles chasudim to the needy who need a short term loan interest free...If someone washed his money and the gmach has no way of knowing why that person withdraws his money. !!!! Its like a bank but interest free....If someone launders money thru Chase or Citibank or any other institution can the govt. freeze all their money.?...Why is this different? ”
I work for a large financial institution. Recently the company required all of its thousands of employees to undergo training to spot abnormalities that may indicate that money laundering is taking place. (I.E. If an account holder deposits large sums of money, can't explain where it came from and withdraws large portions of it immediately not caring about the hefty fees... and yes it does happen to secular institutions.)
A quote from the presentation- "If there is any money laundering going on in the company- regardless of whether any of the employees were knowingly involved or not- the company can face stiff penalties ranging from fines in the millions to revocation of its' federal charter, which in the corporate world is a death sentence".
19
Mar 05, 2010 at 02:36 PM Dave Says:Report as Inappropriate
You lie down in dirt, you get dirty.
Assuming that Mr. Altman was in fact using the Gemach's accounts to launder money, the co-mingled money is going to end up in the government's coffers as the products of criminal acts.
If he was not, then they will get the money back.
20
Mar 05, 2010 at 02:40 PM Anonymous Says:Report as Inappropriate
“ Was Charlie Rangle's money seized as well?
Yeah, I mean the one who writes these laws but himself does not obey them. I am sure he acts in good faith when he writes them, maybe he over looked those millions he didn't pay taxes for.
I guess Dina Dmalchisa Dina only applies to Hassidic Jews. ”
if he owes money i am sure the IRS will get it from him
as to your last staement you are incorrect ( but im sure you already knew that)
22
Mar 05, 2010 at 02:43 PM Anonymous Says:Report as Inappropriate
“ If you earn your money legally I don’t see any problem why you wouldn't deposit your hard earned money in a US bank which is currently insured up to $250,000 by the FDIC. ”
I don;t know why you WOULD deposit money in a US bank these days, the interest you earn is so pitiful, it wouldn't pay the grocery bill of a one person household for a week.
23
Mar 05, 2010 at 03:05 PM Anonymous Says:Report as Inappropriate
“ Was Charlie Rangle's money seized as well?
Yeah, I mean the one who writes these laws but himself does not obey them. I am sure he acts in good faith when he writes them, maybe he over looked those millions he didn't pay taxes for.
I guess Dina Dmalchisa Dina only applies to Hassidic Jews. ”
No it does not and for certain if Charlie Rangel is doing this he should be prosecuted as well. However just because some one else does a crime does not make it right and we as Frum Yidden should be aware of that concept. It may not seem fair and I admit it is not, however we have a higher moral standard to uphold.
24
Mar 05, 2010 at 03:09 PM Anonymous Says:Report as Inappropriate
“ A Gmach is a loan organization where people with money partner in the mitzveh of gemiles chasudim to the needy who need a short term loan interest free...If someone washed his money and the gmach has no way of knowing why that person withdraws his money. !!!! Its like a bank but interest free....If someone launders money thru Chase or Citibank or any other institution can the govt. freeze all their money.?...Why is this different? ”
It is different because person A comes to the Gemach and says I will give you a donation of $100,000 and I want you to give me back $75,000. Person now takes a deduction on his tax return for $100,000 when in essence only gave them $25,000. Further according to IRS laws any "cash" transaction in excess of $10,000 must be reported. The scenario is called "Money Laundering" now what part of this equation do you not understand?
25
Mar 05, 2010 at 03:12 PM Anonymous Says:Report as Inappropriate
“ Tnks for ur reminder, u r so kind, what a gentlman u r!! ”
Perhaps if more people would remind us then this Chilul HaShem would not take place, and even more disturbing is that a high percentage of writers feel there is nothing wrong with doing these things. What happended to your Moral VAlues?
26
Mar 05, 2010 at 03:18 PM Anonymous Says:Report as Inappropriate
I agree with you we all know for a fact that this gemach did not make any money and did not have any idea of what altman did there is no way to protect it
27
Mar 05, 2010 at 03:44 PM Anonymous Says:Report as Inappropriate
“ I don;t know why you WOULD deposit money in a US bank these days, the interest you earn is so pitiful, it wouldn't pay the grocery bill of a one person household for a week. ”
FDIC insured!
FDIC insured!
FDIC insured!
28
Mar 05, 2010 at 03:44 PM Anonymous Says:Report as Inappropriate
“ No it does not and for certain if Charlie Rangel is doing this he should be prosecuted as well. However just because some one else does a crime does not make it right and we as Frum Yidden should be aware of that concept. It may not seem fair and I admit it is not, however we have a higher moral standard to uphold. ”
Do you realize that Charlie writes these tax laws.
While not paying taxes may be a crime it does not necessarily mean it's immoral given the above.
29
Mar 05, 2010 at 04:00 PM Anonymous Says:Report as Inappropriate
“ Does this have to do something with the Klosenburg Gemach in Williamsburg? ”
I'm afraid so.my relative lost afew thousand dollars from there
30
Mar 05, 2010 at 04:23 PM Anonymous Says:Report as Inappropriate
you can't give donations to a gmach and of course there are no Tax diductible reciepts to get in return from a Gmach, so stop bashing something you don't know, if you are jewish "IF" then you are called a self hated jew
31
Mar 05, 2010 at 05:17 PM Anonymous Says:Report as Inappropriate
“ Was Charlie Rangle's money seized as well?
Yeah, I mean the one who writes these laws but himself does not obey them. I am sure he acts in good faith when he writes them, maybe he over looked those millions he didn't pay taxes for.
I guess Dina Dmalchisa Dina only applies to Hassidic Jews. ”
Didn't Obama bribe the louisiana Senator for a vote on Health Insurance why isn't that a crime How abou Tim Geitner for tax evasion and hiding assets they are all sitting and laughing If you are a politican and in Washington the rules areent for you
32
Mar 06, 2010 at 08:38 PM Anonymous Says:Report as Inappropriate
“ I would like to see your tax return..... ”
No problem give me your email address and I will be happy to share my private tax return with you!!
33
Mar 06, 2010 at 08:54 PM Anonymous Says:Report as Inappropriate
“ If you earn your money legally I don’t see any problem why you wouldn't deposit your hard earned money in a US bank which is currently insured up to $250,000 by the FDIC. ”
I guess you didnot do a GAMOCH MITZVA in your life.
34
Mar 07, 2010 at 01:11 AM Meir Says:Report as Inappropriate
A goy like Rangel committing fraud does not mean Yidden may commit fraud any more than a goy eating a ham and cheese sandwich means we may eat treyf. I will defer to gedolim, of course, as my opinion is not even worth their consideration, but I believe halacha generally is not in favor of fraud.
35
Mar 07, 2010 at 01:30 PM Yossi Says:Report as Inappropriate
“ It is different because person A comes to the Gemach and says I will give you a donation of $100,000 and I want you to give me back $75,000. Person now takes a deduction on his tax return for $100,000 when in essence only gave them $25,000. Further according to IRS laws any "cash" transaction in excess of $10,000 must be reported. The scenario is called "Money Laundering" now what part of this equation do you not understand? ”
Yes i do understand but this is NOT the case here....There was NO money laundering here only this guy who made a deposit in Gmach and withdrew his money..There is NO evidence here that and criminial activity was done by this gemach. It is yiddishe hard earned money where people kept there savings to marru off their kids or retire on....I have over $125,000.00 in gemach and i didnt launder and of it..I paid my taxes and i keep it there that other people who need loans to marry off their kids rather to go shnor are treated bederech kuvod...Isnt this what we say every morning..gemiles chasudim .?
36
Mar 07, 2010 at 01:32 PM Yossi Says:Report as Inappropriate
“ No problem give me your email address and I will be happy to share my private tax return with you!! ”
You really think i am stupid....You show on your tax return what u want Uncle Sam to see
37
Mar 07, 2010 at 03:07 PM Dave Says:Report as Inappropriate
“ Yes i do understand but this is NOT the case here....There was NO money laundering here only this guy who made a deposit in Gmach and withdrew his money..There is NO evidence here that and criminial activity was done by this gemach. It is yiddishe hard earned money where people kept there savings to marru off their kids or retire on....I have over $125,000.00 in gemach and i didnt launder and of it..I paid my taxes and i keep it there that other people who need loans to marry off their kids rather to go shnor are treated bederech kuvod...Isnt this what we say every morning..gemiles chasudim .? ”
So, here is the problem.
If the Gmach accounts were used to launder money (which is the allegation), than as part of a criminal enterprise, they can in fact be seized under law.
38
Mar 07, 2010 at 09:38 PM Anonymous Says:Report as Inappropriate
“ If you earn your money legally I don’t see any problem why you wouldn't deposit your hard earned money in a US bank which is currently insured up to $250,000 by the FDIC. ”
well, well , and if you make over a million dollars annualy, hard earned, as legal as can get, if you put that money into the bank, you'll pay 50% of it to taxes
39
Mar 07, 2010 at 11:34 PM Halacha Says:Report as Inappropriate
“ If you earn your money legally I don’t see any problem why you wouldn't deposit your hard earned money in a US bank which is currently insured up to $250,000 by the FDIC. ”
Because if you put it in a gemach you can get the mitzva of helping hundreds of Jews a year through the mitzva of "im kesef talveh es ami". The Chofetz Chaim's third largest sefer after Chofetz Chaim and Shmiras Haloshon (not counting mishna brurah) was Ahavas Chesed, on the mitzvah of lending money to help your fellow Jew. An idea that obviously never occurred to you.
40
Mar 08, 2010 at 12:59 AM Anonymous Says:Report as Inappropriate
Another misleading media headline. Here's the correction.
Judge: Gmach TO WAIT LONGER Before Claiming Back $500,000 Seized in FBI Corruption Sting
The government seized the $508,925 from one of Gmach's accounts.
The Gmach filed a district court action seeking return of the funds
based on 18 U.S.C. 983, which gives the government 60 days to start a forfeiture action after it seizes property,
and Federal Rule of Criminal Procedure 41(g), which allows a person aggrieved by the unlawful seizure of property to move for its return.
Judge Falk ruled that the Gmach could not rely on the statute (18 U.S.C. 983), [which would instantly return the funds to the Gmach].
The government argued altman's indictment mooted the Gmach's Rule 41(g) action (= funds lost).
The Judge held the Gmach's motion was NOT "legally moot" because it was filed before the indictment.
The Gmach claimed they would have to wait too long for the outcome in the criminal case, and also would not be able to challenge forfeitability there, only ownership.
The Judge claimed proof of ownership in the criminal case would get the Gmach's money back, with no big wait.