Los Angeles, CA – Israeli Banker Pleads Guilty In Spinka Money-Laundering Schem

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    Los Angeles, CA – An Israeli banker pleaded guilty Friday to taking part in an elaborate tax fraud and money-laundering scheme that prosecutors claim involved the leader of an Orthodox Jewish group and several Los Angeles businesses.

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    Joseph Roth, 66, of Tel Aviv, pleaded guilty to conspiracy to commit tax fraud. U.S. District Judge George Schiavelli scheduled sentencing for Oct. 20, when Roth faces a statutory maximum term of five years’ imprisonment and a $250,000 fine.

    Roth once worked at the Los Angeles branch of the Israel-based Mizrahi Tefahot Bank Ltd., and is the first defendant in the case to plead guilty.

    Roth is one of several defendants named in a 37-count federal grand jury indictment alleging that Naftali Tzi Weisz, the 59-year-old Grand Rabbi of Spinka, promised to secretly refund between 80 percent and 95 percent of millions of dollars of contributions to several Spinka charities.

    The contributors could claim the full amount for tax deductions, even though they gave as little as 5 percent of the amount declared on federal income tax returns, prosecutors said.

    The secret refunds, or kickbacks — as prosecutors have called them — allegedly were laundered through third parties.

    Spinka is the name of a Hasidic sect within Orthodox Judaism. The group is named for the European town where it originated along the border of Hungary and Romania.

    Trial is set for Sept. 9.

    After Friday’s hearing, Roth smiled and shook the hand of the case’s lead prosecutor, Assistant U.S. Attorney Daniel O’Brien.

    Roger J. Rosen, one of Roth’s attorneys, told reporters he was pleased with how the case has been resolved, but he had no comment on whether Roth was cooperating with the U.S. Attorney’s Office.

    Roth — who has been in federal custody since late last year because he was deemed a flight risk — helped American contributors get loans from Mizrahi Tefahot Bank, so the money could be used in the United States, prosecutors said.

    The contributors also could hire Spinka to help secretly repatriate the money into the United States in exchange for an additional money-laundering fee after the money was placed in secret accounts at the bank, prosecutors allege.

    In addition to Roth’s guilty plea, another prominent defendant in the case, Weisz’s personal assistant, Gabbai Moshe Zigelman, 60, of Brooklyn, N.Y., has agreed to plead guilty to one count of conspiracy to commit tax fraud, according to court documents.

    Zigelman is alleged to have played an integral role in the scheme, paying kickbacks and laundering large amounts of contributions from “R.K.” — a participant in the scheme who turned into a government informant once he ran into problems with federal authorities.

    One method Weisz and Zigelman allegedly used to issue the secret refunds was by an underground money transfer network involving other parties, including businesses in and around downtown Los Angeles’ jewelry district.

    One business was run by 60-year-old Los Angeles resident Moshe Arie Lazar.

    Other defendants in the case include Yaacov Zeivald, 43, of Valley Village, Los Angeles residents Yosef Nachum Naiman, 55, and 43-year-old Alan Jay Friedman and Tel Aviv attorney Jacob Ivan Kantor.

    Five Spinka charities were also named as defendants: Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn and Mesivta Imrei Yosef Spinka. The charities are alleged to have used fraudulent receipts for bogus charitable contributions and benefited from fees charged for transfers of funds as part of the money laundering conspiracy.


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    19 Comments
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    misnaged
    misnaged
    15 years ago

    hashem yerachem

    I would think we should better invest ourselves with torah im derech eretz as perhaps then we would have the learned “intelligence” and know what the law is.

    genugshein
    genugshein
    15 years ago

    But the yeshivah cries they have no money!!

    How do rebbehs get up at the pulpit on rosh hashanah and tell their followers abo9ut being honest in business and not stealing??

    No wonder why we have kids at risk, just look at the leadership in our midst. Nebach. Hashem yerachem… PLEASE HASHEM SAVE US AND BRING MOSHIACH.

    tide follower from KAJ
    tide follower from KAJ
    15 years ago

    The shame -to see names of supposedly b’nei Torah using the Torah,its ideals,its clothing,its piety and hide behind all that to cowardly use it as a shield to hide behind while doing criminal behavior making all K’lal Yisrooel look bad in the eyes of the world,just when we need the sympathy and cooperation of the good people in the world.Just when we need Hashem’s Rachamim our fellow Jews turn against us. May the rest of am Yisroel not be affected and may the tzoros our people are experiencing be a warning for all of us to seriously understand our mission in this world as b’nei Torah. May we show the world what Hashem and the Torah really mean what Yidden are all about.

    Gefilte Fish
    Gefilte Fish
    15 years ago

    Rebbis talking on rosh hashana about not stealing results in kids at risk. I definitely see the conection!

    joey
    joey
    15 years ago

    this guy is a dummy he flew in from israel to get himself arrested ?

    farshtunkine un farbissine litvak
    farshtunkine un farbissine litvak
    15 years ago

    The rabbis dont preach this on rosh hashana or anytime…cause they can ill afford to speak. Where oh where are the real rabbis?

    Anonymous
    Anonymous
    15 years ago

    yup! the kids at risk have absolutely nothing to do with your unfiltered internet at home open for the kids, nothing with the video projector at home, nothing with the live example some see in front of them at home or at the neighbor’s home. the kids at risk are definitely and only a direct result of a Rabbi accused of laundering money in Los Angeles…

    common, gimme a break.

    Anonymous
    Anonymous
    15 years ago

    Is the Rebbe gonna sit, or will there be a fall guy?

    Anonymous
    Anonymous
    15 years ago

    Yes, some kids are at risk because they see the hypocrisy of a rabbi preaching to his congregants not to steal, be a ben torah only for that rabbi to be carted off to jail for stealing himself. Certainly not the only reason kids are at risk but definitely a contributing factor. A little more mussar in Toram Im Derech Eretz may go a long way.

    Jew
    Jew
    15 years ago

    Where do the Concert Ban Rabbis stand on this? Which newspaper did they take an ad out in this time?

    REBEH
    REBEH
    15 years ago

    PLEASE SEE TO IT THAT WE SHOULD ALL BE MISPAALEL FOR ALL OF THEM TO HAVE A LOT OF HATZLACHA, NO ONE IS PERFECT AND NO ONE CAN EVAN POST THAT THERE PERFECT EVRYONE HAS COMMITIT CRIMES (ie NOT PAYING SALES TAX OR NOT CLAIMING FOR YOUR FULL INCOME TAX ETC.) PLEASE DONT SAY ANYTHING FOOLISH AND HASHEM SHOULD HELP US ALL FOR ALL OUR NEEDS!

    Anonymous
    Anonymous
    15 years ago

    HaShem Yerachem on all the Yidden in/going to prison, as well as on the bloggers who make such nasty comments…

    Anonymous
    Anonymous
    15 years ago

    America is not Eastern Europe. The attitudes towards government and its laws that existed under the czars and cossacks have no place in this malchus shel chesed.

    Anonymous
    Anonymous
    15 years ago

    stealing millions of dollars in the name of tzedakah. The understatement of the year – ” no one is perfect”. Very funny!

    Matzahlocal101
    Matzahlocal101
    15 years ago

    I davened in Spinka last week. When the gabbai came by with the pushka, I gave him a dollar and asked for change. He said “we don’t do that anymore.” He put the dollar in the pushka and walked away.

    Anonymous
    Anonymous
    15 years ago

    maybe he thought you were asking for a reciept for $1,000

    ich darf a metziah
    ich darf a metziah
    15 years ago

    I cant believe I paid 10% all these years and besserer mentchen were only paying 5%. If they think they have problems now wait till i send my “rent collectors” over to get my other 5% back.

    Anonymous
    Anonymous
    15 years ago

    Chasidim are Klal yisroel. Without them yidishkeit would have been on shutdown r”l.

    chasidim are the greatest///////

    Anonymous
    Anonymous
    15 years ago

    עשיו שונא את יעקב