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Friday, December 28, 2007

Bail Set In Hassidic Money Laundering Case

Bail Set In Orthodox Jew Money Laundering Case

The Defendent Is Being Held Because He Is Seen As A Flight Risk

LOS ANGELES (CBS) ― Bail was set today for an Israeli man accused of tax fraud, but a federal magistrate judge then delayed granting bail until the government could appeal his decision. Joseph Roth, 66, is one of six men arrested in connection with the money laundering ring.

Roth, of Tel Aviv, is accused of participating in a sophisticated tax fraud and money laundering scheme involving an Orthodox Jewish sect that allegedly cheated the IRS out of millions of dollars.

Bail was set at $1.9 million by U.S. Magistrate Judge Stephen Hillman in a hearing this morning at U.S. District Court in downtown Los Angeles. Hillman then granted Assistant U.S. Attorney Daniel O'Brien's request to stay the ruling so the government can appeal it to the federal district judge assigned to Roth's case.

O'Brien said the fact that Roth is not a U.S. citizen, Roth's age, and a 1977 Israeli law barring extradition of Israeli citizens, makes Roth a significant flight risk.

Roth will remain in federal custody until at least Jan. 4, pending the district judge's decision on Hillman's ruling.

Arraignment for six of the defendants named in the indictment is scheduled for Dec. 31.

Roth, the assistant manager of the Israel-based Mizrahi Bank, was named along with the Grand Rabbi of Spinka Naftali Tzi Weisz, and four others in federal grand jury indictment. Weisz, 59, of Brooklyn, N.Y., is currently free on $2 million bond. Roth is the only defendant currently in jail.

The indictment alleged that Roth and the others participated in a sophisticated scheme to use Spinka charities to pay illegal kickbacks to donors so they could cheat the Internal Revenue Service. The defendants then laundered the money through businesses in downtown Los Angeles' jewelry district and Mizrahi Bank, according to court documents.

Spinka is a Hasidic sect within Orthodox Judaism that originated in a European town along the border of Romania and Hungary.


Just for curiosity sake, HERE are Israel's own money laundering laws

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