Hasidic Leaders Arrested

By Marc Perelman

Published December 26, 2007, issue of December 28, 2007.
  • Print
  • Share Share

A chief rabbi of the Spinka ultra-Orthodox sect and his aide were indicted in California last week for using their synagogues to launder money.

Rabbi Naftali Tzvi Weisz was arrested in Los Angeles along with his top aide, Moshe Zigelman, for what the U.S. Attorney’s Office describes as a “sophisticated tax fraud and money laundering scheme” spanning from Israel to Los Angeles via Brooklyn.

According to the 37-count indictment handed down December 19 by a grand jury, Weisz and Zigelman solicited donations to several Brooklyn-based charities connected to the Spinka ultra-Orthodox sect.

The donations were declared as tax deductible, but Weisz and his aide secretly promised to return between 80% and 95% of the money to the donors while keeping the difference as a fee, according to the charges.

Weisz is the grand rabbi of Brooklyn’s Boro Park branch of the Spinka, a small Hasidic movement named after the Romanian town where it was founded in the 19th century.

After the first grand rabbi’s son was killed during the Holocaust, the Spinka sect split into a number of offshoots, following different grand rabbis around the world. Many Spinka Hasidim live in Brooklyn, but there are also communities in Israel, Europe and Los Angeles.

According to the indictment unsealed last week, the scam began in 1996 and continued through 2007. It involved millions of dollars channeled through five Brooklyn-based charities, which were also cited as defendants in the case.

The charities used two methods to hide the money and to return up to 95% of the money to the donors, the indictment said. One was to pass the cash through a money transfer network based in the Los Angeles jewelry district.

The second method was to wire the donations from Spinka-controlled entities to secret bank accounts established at a bank in Tel Aviv, with the support of a bank manager and a local attorney. The money was then used to obtain loans from the Los Angeles branch of the bank, where the donors could retrieve it. Another possibility for donors was to ask Spinka leaders to secretly repatriate the money into the United States in exchange for an extra fee.

In January of this year, according to the indictment, Zigelman and Weisz estimated that they had collected more than $8 million in phony donations, securing for themselves a profit of nearly $750,000.

The indictment charges them with conspiracy to defraud the IRS and with money laundering. They also face 19 counts of mail fraud, 11 counts of international money laundering and one count of operating an illegal money-remitting business. Zigelman is also accused of helping to prepare fraudulent income tax returns. Six associates were also charged. Four of them were arrested in California, and the two others are believed to be in Israel.

Samuel Heilman, a professor at the City University of New York and an expert on the ultra-Orthodox, charged that the incident reflects a disregard for secular law.

“There is a great temptation among these rabbis, who come from a culture that often views the ‘government’ as in the hands of enemies, to believe that for ‘higher’ motives is acceptable,” Heilman said. “In fact, often their temptations are driven by more venal and selfish aims than they might acknowledge.”






Find us on Facebook!
  • Is Twitter Israel's new worst enemy?
  • More than 50 former Israeli soldiers have refused to serve in the current ground operation in #Gaza.
  • "My wife and I are both half-Jewish. Both of us very much felt and feel American first and Jewish second. We are currently debating whether we should send our daughter to a Jewish pre-K and kindergarten program or to a public one. Pros? Give her a Jewish community and identity that she could build on throughout her life. Cons? Costs a lot of money; She will enter school with the idea that being Jewish makes her different somehow instead of something that you do after or in addition to regular school. Maybe a Shabbat sing-along would be enough?"
  • Undeterred by the conflict, 24 Jews participated in the first ever Jewish National Fund— JDate singles trip to Israel. Translation: Jews age 30 to 45 travelled to Israel to get it on in the sun, with a side of hummus.
  • "It pains and shocks me to say this, but here goes: My father was right all along. He always told me, as I spouted liberal talking points at the Shabbos table and challenged his hawkish views on Israel and the Palestinians to his unending chagrin, that I would one day change my tune." Have you had a similar experience?
  • "'What’s this, mommy?' she asked, while pulling at the purple sleeve to unwrap this mysterious little gift mom keeps hidden in the inside pocket of her bag. Oh boy, how do I answer?"
  • "I fear that we are witnessing the end of politics in the Israeli-Palestinian conflict. I see no possibility for resolution right now. I look into the future and see only a void." What do you think?
  • Not a gazillionaire? Take the "poor door."
  • "We will do what we must to protect our people. We have that right. We are not less deserving of life and quiet than anyone else. No more apologies."
  • "Woody Allen should have quit while he was ahead." Ezra Glinter's review of "Magic in the Moonlight": http://jd.fo/f4Q1Q
  • Jon Stewart responds to his critics: “Look, obviously there are many strong opinions on this. But just merely mentioning Israel or questioning in any way the effectiveness or humanity of Israel’s policies is not the same thing as being pro-Hamas.”
  • "My bat mitzvah party took place in our living room. There were only a few Jewish kids there, and only one from my Sunday school class. She sat in the corner, wearing the right clothes, asking her mom when they could go." The latest in our Promised Lands series — what state should we visit next?
  • Former Israeli National Security Advisor Yaakov Amidror: “A cease-fire will mean that anytime Hamas wants to fight it can. Occupation of Gaza will bring longer-term quiet, but the price will be very high.” What do you think?
  • Should couples sign a pre-pregnancy contract, outlining how caring for the infant will be equally divided between the two parties involved? Just think of it as a ketubah for expectant parents:
  • Many #Israelis can't make it to bomb shelters in time. One of them is Amos Oz.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.