Back in August, Edmund Connelly wrote about a culture of corruption that pervades the Orthodox Jewish community in New York and New Jersey. Solomon Dwek’s rabbi father renounced him after he informed on money laundering within the community as part of a plea bargain in his case of bank fraud. Now New Jersey.com reports that the feds are investigating Dwek’s charitable contributions. The basic scheme is to contribute to a Hassidic charity in order to get a tax write-off, but then receive kickbacks of up to 95% of the money from the charity. But it’s far wider than just Dwek: “In Los Angeles, more than 100 contributors to a Hasidic Jewish sect in Brooklyn are being investigated by the U.S Attorney for the Central District of California in connection with the same kind of kickbacks spelled out in the New Jersey cases.”
Those involved are often religious leaders and the wealthy:
A similar scheme led to federal charges in 2007 against the Grand Rabbi of Spinka, the spiritual leader of an Orthodox sect based in Brooklyn. Millions of dollars were contributed to Spinka organizations from donors who secretly got back up to 95 percent of their money — despite declaring all of it as charitable giving on their federal income taxes.
Grand Rabbi Naftali Tzi Weisz, 61, of Brooklyn pleaded guilty earlier this year in Los Angeles, where the case was prosecuted, and is awaiting sentencing.
One of the contributors to the Spinka charities, David Hager, 55, of Los Angeles, was sentenced earlier this year to six months in federal prison after pleading to two counts of tax evasion. He was accused of claiming deductions for contributions that had been reimbursed at a rate of 90 cents for every dollar he donated.
Hager was worth over $400 million, according to court records.