Joseph Roth, an Israeli banker, pleaded guilty last week to participating in a massive tax fraud and money laundering scheme that cheated the federal government out of at least $33 million. Roth’s charge of conspiracy to commit tax fraud could net him up to five years in prison and a $250,000 fine.
Roth is just one person in what prosecutors are calling a massive scheme. Seven other individuals and five charities were indicted by a grand jury in the scheme last year. Prosecutors charge that the defendants helped people avoid paying federal income taxes by having them make contributions to charitable groups run by Spinka, a New York based Orthodox Jewish group. Authorities claim that the donations to Spinka charities were promoted as a scheme wherein the donations would be largely refunded to the donors through an Israeli bank; donors would, however, claim a tax deduction on the full amount.
The lead defendants in the case are Rabbi Moshe E. Zigelman and Grand Rabbi Naftali Tzi Weisz of Brooklyn, New York. Four Los Angeles men were also charged with taking part in the scheme: Yaacov (Yankel) Zeivald, Yosef Nachum Naiman, Alan Jay Friedman and Moshe (Marvin) Arie Lazar (the latter is believed to remain in Israel).
Zigelman is expected to plead guilty to the same charge at a hearing later this week. Weisz has pleaded not guilty to the charges; he and the remaining defendants are scheduled to go on trial later this summer.
Rabbi Meyer H. May, president of the Rabbinical Council of California, has denounced any wrongdoing and reminded folks that anyone guilty of such fraud are not representatives of the Orthodox or Hasidic community. “Ninety nine percent do pay taxes correctly, do abide by the law, do take their positions as citizens of the United States seriously and ethically.”
