ISRAEL: Rabbi indicted in tax fraud and money laundering scheme

Grand Rabbi of Spinka sect accused of helping to solicit millions of dollars in contributions to five charitable groups by promising to secretly refund up to 95 percent of the donations so contributors could falsely claim higher tax deductions

Published: 12.20.07, 12:44 / Israel Jewish Scene

The head of an Orthodox Jewish group was arrested along with several associates Wednesday, accused of operating a sophisticated tax fraud and money laundering scheme involving millions of dollars.

Naftali Tzi Weisz, 59, identified as the Grand Rabbi of Spinka, faces federal charges including conspiracy, mail fraud and money laundering, according to a 37-count indictment returned Tuesday. He was expected to make an initial appearance in federal court in Los Angeles on Wednesday afternoon.

Authorities say Weisz helped solicit millions of dollars in contributions to five Spinka charitable groups by promising to secretly refund up to 95 percent of the donations. That way, the contributors could falsely claim higher tax deductions.

In some cases, donors received cash payments through an underground money transfer network involving business owners in Los Angeles' jewelry district, prosecutors said. Contributors also were reimbursed through wire transfers from Spinka-controlled entities into accounts secretly held at a bank in Israel, prosecutors said.

Weisz is from Brooklyn, N.Y., where the charitable organizations are based.

Also indicted were his executive assistant, Moshe E. Zigelman, 60. Six of the seven charged in the case were taken into custody as federal agents conducted searches in Los Angeles and New York on Wednesday morning.

It was unclear whether the defendants had retained attorneys yet.

Source: http://www.ynetnews.com/articles/0,7340,L-3484880,00.html