Former Chabad of Poway rabbi sentenced to 14 months in prison for fraud

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Published on Jan 5, 2022
SAN DIEGO (KGTV) — A former Poway rabbi who survived the 2019 synagogue shooting has been sentenced to 14 months in prison for his role in a donation fraud scheme.

Yisroel Goldstein, the former Chabad of Poway rabbi, pleaded guilty in 2020 to orchestrating the fraud scheme, admitting to having a role in a 90-10 "tax deduction conspiracy."

He has also been ordered to pay $2,834,608 in restitution.

Per the plea agreement, Goldstein admitted to:

"According to his plea agreement, while [he] was director of the Poway synagogue, he received at least $6.2 million in phony contributions to the Chabad and affiliated charities and secretly refunded up to 90 percent of the donations to the “donors.” After Rabbi Goldstein provided these donors with fake receipts, they illegally claimed huge tax deductions for these nonexistent donations, and the rabbi kept about 10 percent – more than half a million dollars over the course of the fraud - for himself. Tax losses to the IRS were more than $1.5 million.

Rabbi Goldstein also admitted that he defrauded three different Fortune 500 companies by tricking them into matching supposed charitable donations of their employees. Working with the employees, Rabbi Goldstein fabricated receipts and then secretly returned their fake “donations.” This allowed the employees to claim tax deductions for the completely fabricated donations, and allowed Rabbi Goldstein to collect the companies’ matching funds—including some that matched double their employees’ donations. Rabbi Goldstein helped to orchestrate this scheme with at least six taxpayer-employees and two other associates who helped recruit new donors or conceal the true recipient of the funds. In total, Rabbi Goldstein defrauded the companies out of at least $144,000, and helped the taxpayer-employees to claim nearly as much in fictitious tax-deductible charitable contributions to the IRS.

Rabbi Goldstein admitted that he also helped his brother Mendel Goldstein conceal approximately $700,000 in income by allowing him to use Chabad bank accounts to deposit his income, thereby hiding it from the IRS. As his cut, Rabbi Goldstein kept 10 percent of this individual’s income—more than $70,000.

Separate and apart from the tax evasion scheme, Rabbi Goldstein and another defendant, Alexander Avergoon, used false information and fabricated invoices and other records to pretend to be eligible for emergency funds, grants or donations, and private loans. These frauds on the Federal Emergency Management Agency (FEMA), the California Governor’s Office of Emergency Services (Cal OES), and private foundations resulted in losses to these programs of at least $860,000."

Brewer added at the time of the announcement that Goldstein was accused of creating fraudulent invoices for various entities, including the Federal Emergency Management Agency and other entities.

In 2019, Goldstein fell into the national spotlight after a gunman opened fire inside the Chabad of Poway during the final day of Passover, fatally wounding 60-year-old Lori Gilbert Kaye. Goldstein was shot in both index fingers and three others were injured, including a young girl.

Following the announcement of charges, the Chabad of Poway said it removed Goldstein from his duties and terminated its relationship with him:

"Upon learning of these allegations some months ago, we launched an internal review, following which the rabbi was removed from all of his duties at Chabad of Poway, his relationship with the organization terminated, and he was dismissed by Chabad-Lubavitch Headquarters as a representative of the movement.

We hope and pray that Rabbi Goldstein finds the professional help that he needs and makes amends to our country and to the people he has hurt. And we pray that the Goldstein family find the healing they so deserve."
In court on Tuesday, emotions ran high as Goldstein spoke and pleaded for forgiveness, saying he prays every night for mercy. Hannah Kaye, the daughter of Lori Kaye, said she partially blamed Goldstein for her mother's murder, accusing Goldstein of saying there was no money to upgrade the synagogue and keeping the funds for himself.

While prosecutors initially recommended home confinement for Goldstein, the judge said that the case was too severe. Goldstein must report to begin his sentence on Feb. 23, 2022.

Category
Money System / IMF / FED
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Former Chabad Poway rabbi sentenced months prison fraud

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