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Wednesday, December 19, 2007

Hasidic Rabbis and Others Arrested, on Money Laundering and Other Charges in Los Angeles

(Note: this is NOT a "church leader" this is a Rabbi. I wonder why they titled this news item which just came out that way)

UPDATE: the source has changed the title to "Spiritual Leader Arrested in Tax Fraud, Money Laundering Case" What the heck is going on?)

Church Leader Arrested In Tax Fraud, Money Laundering Case

The leader of an Orthodox Jewish group was arrested Wednesday morning along with several others on suspicion of tax fraud and laundering money through an Israeli bank and several business in the jewelry district in downtown Los Angeles.

Naftali Tzi Weisz, the 59-year-old Grand Rabbi of Spinka, and Gabbai Moshe E. Zigelman, 60, both of Brooklyn, N.Y., were named Tuesday in a federal grand jury's 37-count indictment in Los Angeles.

The indictment, unsealed Wednesday morning, claims that Weisz and Zigelman promised to secretly refund up to 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 five percent of the amount declared on federal income tax returns, according to the U.S. Attorney's Office.

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 the jewelry district.

Several defendants named in Tuesday's indictment were arrested Wednesday morning: Yaacov Zeivald, 43, of Valley Village; and Los Angeles residents Yosef Nachum Naiman, 55, and 43-year-old Alan Jay Friedman.

Another defendant allegedly involved in the jewelry district-based underground network is 60-year- old Los Angeles resident Moshe Arie Lazar, who is believed to be in Israel.Another method prosecutors claim Weisz and Zigelman used to cheat IRS was by wiring transfers from Spinka-controlled entities into secret accounts at an Israeli bank.

The indictment names Joseph Roth, 66, and attorney Jacob Ivan Kantor, 71, both of Tel Aviv, as participants in this scheme.

Roth allegedly helped American contributors get loans from the Los Angeles branch of the Israeli bank, so the money could be used in the United States.

Prosecutors claim that 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 the secret accounts at the Israeli bank.

Roth was arrested in Los Angeles on Wednesday morning. Kantor is believed to be in Israel.

Weisz and Zigelman are charged with one count of conspiracy to defraud the Internal Revenue Service, 19 counts of mail fraud, 11 counts of international money laundering, one count of conspiracy to commit money laundering and one count of operating an illegal money remitting business.

Zigelman is also charged with two counts of aiding in the preparation of false federal income tax returns.

Roth is charged in both conspiracy counts; several counts of mail fraud and several international money laundering counts. Kantor is charged in the conspiracy counts and several international money laundering counts.

Zeivald, Lazar, Naiman and Friedman are charged in the main conspiracy count and with operating an illegal money remitting business. Zeivald is also charged with one count of mail fraud.

If convicted, all face long prison terms.

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

Weisz, Zigelman, Roth, Zeivald, Naiman and Friedman are scheduled to make their initial appearances Wednesday afternoon in U.S. District Court in downtown Los Angeles. All six were arrested in the Los Angeles area Wednesday morning.


INFO: Spinka: The Hasidic Dynasty

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