After son of criminal rabbi takes over Poway synagogue, some congregants quit
The funeral of Lori Gilbert Kaye, shot in a San Diego synagogue. Image by Getty Images
By Louis Keene October 13, 2020
After a high-profile rabbi came under investigation for fraud, the rabbi’s son took over the synagogue and brought in three outsiders to set it straight. But the timing of the son’s takeover and the existence of his new board of directors was kept secret for months, leaving a congregation already shellshocked from an antisemitic attack split over the scandal and the synagogue’s path forward.
Chabad of Poway entered the national spotlight in April 2019, after a vicious shooting that left a woman dead in its lobby on the final day of Passover. By then, Rabbi Yisroel Goldstein, who lost a finger in the attack, was already cooperating with federal authorities, though his congregants — and the nation that watched him lead them in mourning — did not know it. The case did not become public until 15 months later, when the U.S. Attorney’s office announced Goldstein’s guilty plea on July 14.
News of their former rabbi’s decades-long, multimillion-dollar criminal conspiracy forced congregants to ask painful questions:
Had Goldstein’s misconduct — which included fraud related to government grants for the synagogue’s security — enabled the shooter to walk unimpeded through the building’s front door?
When Goldstein retired quietly seven months after the shooting, who decided that his son Mendel should take his place?
Whom could they trust?
“You’re trying to overcome and get past the tragedy, and the place you look at as a sanctuary, it’s not a sanctuary,” said Oscar Stewart, a congregant who left the synagogue when he learned of the rabbi’s actions.
Rabbi Yisroel Goldstein speaking at a press conference in 2019. Image by Getty
Stewart is one of a few members dismayed by the steps Mendel Goldstein, who is also a rabbi and is not charged in the investigation, took to ensure the synagogue’s long-term health.
This board of directors operated in near-total silence from its inception in July 2019 until this Sept. 16, when they were introduced at a congregational town hall on Zoom. Jeffrey Gelwix, one of the new board members and now the synagogue’s chief financial officer, said the group stayed quiet to avoid interfering with the investigation — which Mendel Goldstein thought would involve congregants — but that the board did not know the details of the case until the plea agreement was made public.
“It took a couple months to wrap our arms around everything,” said Gelwix, 32, a local business owner and licensed accountant who went to the Chabad’s preschool.
But winning back the trust of current and former congregants at the synagogue, where weekly turnout ranged from 20 to 100 before the pandemic, may prove difficult. Yisroel Goldstein’s admission to decades of tax evasion and government fraud cut a deep wound in a community still reeling from the trauma of April 27, 2019, when a white nationalist extremist stormed Chabad of Poway on the last day of Passover, killing Lori Gilbert-Kaye and wounding three others, including Goldstein.
Stunned by the revelation of the plea agreement and troubled by what felt at the time like a lack of institutional response in the weeks following, many congregants left the synagogue — as many as half, according to one former member, who could list 10 such families off the top of her head. And while the new board’s efforts to turn the page have resonated with some, others say they can’t trust the synagogue with any Rabbi Goldstein at the helm.
Interviews with more than a dozen current and former Chabad of Poway congregants paint a picture of a synagogue whose silence following the plea agreement — possibly intended to keep calm — sowed confusion and alarm, and a community whose feelings of betrayal may not be easily resolved.
“They need to bring someone other than a Goldstein in order to get members to come back,” said Doris Okonsky, who left Chabad of Poway in July after more than 30 years as a member. “If they want to keep the temple going, I think they need to bring new blood.”
Mendel Goldstein declined to comment when reached by phone. He did not respond to later requests.
‘Challah’ ready for pickup
After wildfires swept across San Diego County in 2007, Rabbi Yisroel Goldstein applied for and received a grant from the Federal Emergency Management Agency for repairs.
In 2012, not long after the arrest of two white-supremacists who plotted to attack Jewish organizations on the West Coast, he got a government grant to improve security at the synagogue.
And amid a flurry of antisemitic incidents across the country in 2018, the government awarded Goldstein another $75,000 for facility upgrades.
But Chabad of Poway was never damaged by the 2007 wildfires. And Goldstein kept the 2012 security funds for himself, according to court documents.
Chabad of Poway Image by Google Maps
The facility upgrade grant from 2018? It was awarded to a mysterious nonprofit, Cong. Bnei Yisroel, which was registered to the rabbi’s home address. Goldstein spent the money improving his hilltop mansion, U.S. Attorney Robert Brewer said in a news conference announcing the plea agreement July 14.
According to court documents, Goldstein used the synagogue’s nonprofit status to enrich himself for decades. In what the FBI refers to as a “90/10” scheme, Goldstein would accept a large donation — as much as $1 million in one case — on behalf of the congregation, and produce a receipt enabling the donor to claim the amount as a tax return. He would then return 90% of the donation under the table and pocket the rest. As the FBI and IRS searched emails and text message records, they found Goldstein referring to cash as “challah” brought by a “baker” — his cash supplier, whom the FBI has not publicly named.
In another grift described in the plea agreement, Goldstein took advantage of corporate matching of employee donations. His co-conspirators made five-figure donations to the local chapter of the Friendship Circle, a Chabad-associated nonprofit that provides services for people with disabilities. Goldstein would kick back each private donation to its source and keep the matching funds — a total of about $134,000 from three Fortune 500 companies — for himself.
But it is Goldstein’s fraud in connection with government grants that has been most difficult for some in the community to make peace with. The rabbi’s actions, they claim, may have indirectly cost a congregant her life.
“She was probably given the short end of the stick in all this,” said Okonsky, who described herself as a close friend of Gilbert-Kaye’s. “She died for him, basically — took the bullet for him. That’s the sad part.”
Chabad of Poway received $336,750 in three government grants from 2010 to 2018, according to court documents, including $75,000 to improve security. But Goldstein misappropriated at least $275,000 of the total allocation.
There was no guard on duty the day of the shooting, and surveillance video played at a court hearing for John T. Earnest, the alleged shooter, showed the Chabad’s front door was not only unlocked, but also open.
Charting Yisroel Goldstein’s Government Grants
Grants received, and misappropriated, by Chabad of Poway Rabbi Yisroel Goldstein.
If the synagogue had actually had the full grant to spend, many congregants are asking, would it have had a security guard on duty the day of the shooting?
Steve Schneider, who moved to Oregon in 2016 after 20 years as a member of Chabad of Poway, said he had urged Goldstein to hire armed security on several occasions during his time there. “He sort of blew it off,” Schneider said, “like it wasn’t important.”
In addition to these three grants totaling more than $336,000, the synagogue also was awarded a $150,000 security grant in September 2018 that is not mentioned in the FBI charges but is the subject of a civil lawsuit by one of the congregants injured in the shooting, Almog Peretz. The AP reported last year that the synagogue did not receive the funds until March 2019 — a month before the shooting. The lawsuit accuses Chabad of Poway of failing to use the funds and also names Chabad of California and Chabad’s world headquarters, saying they did not ensure their member synagogue did not protect its congregants.
Peretz’s attorney, Yoni Weinberg, said the case was likely to go to trial.
“They had plenty of time to either set up security installations that could have been installed immediately upon receipt of the funds, or even to pay the money up front and cover it with the funds,” Weinberg said in an email.
Yisroel Goldstein’s lawyers, Jeffrey Delicino and Benjamin Coleman, did not respond to requests for comment. A voicemail left on Goldstein’s cell phone was not returned.
Chabad of California and Chabad-Lubavitch World Headquarters did not return requests for comment on the civil case.
The FBI and IRS investigation into Goldstein began in 2016, stemming from a related case against Alexander Avergoon, a real-estate investor who was operating a Ponzi scheme. Avergoon, who fled to Latvia before he was apprehended by the FBI last year, has pleaded guilty to his role in Goldstein’s and other schemes. His lawyer, Adam Doyle, declined comment.
Prosecutors announcing the plea agreement of the rabbi’s brother, Mendel Goldstein, on Sept. 14 said he helped the rabbi conceal $700,000 in income from the IRS. A sentencing hearing is scheduled for Dec. 14, and he faces a maximum of five years in prison.
(Goldstein’s son’s full name is Menachem Mendel Goldstein, but he is known by his middle name in Poway.)
The case against Yisroel Goldstein, who U.S. Attorney Brewer called “the center of the criminal activity,” came to a head in a sting operation in the summer of 2018, when the rabbi made a 90/10 exchange with an undercover agent. In mid-October 2018, investigators from both agencies conducted a raid on Goldstein’s home, office and safe deposit box.
Goldstein laundered $6.2 million in phony contributions, court records say, costing the IRS at least $1.5 million. The FBI says at least $18 million was circulated in the conspiracy. The joint investigation has already revealed around two dozen possible co-conspirators, six of whom have entered guilty pleas.
“This was an elaborate, long-term scheme that involved careful planning, attention to detail, and significant deception,” Brewer said.
Citing Goldstein’s cooperation with the investigation and his leadership in the aftermath of the shooting, the U.S. Attorney’s office has recommended probation for the rabbi. A sentencing hearing is scheduled for April 26, 2021.
Though he agreed to cooperate with the investigation following the raid, Yisroel Goldstein privately set about tipping off at least five co-conspirators, including his brother Mendel, that December, documents say.
Assistant U.S. Attorney and lead prosecutor Emily Allen, speaking after Brewer at the news conference, said, “His time where he was making efforts to obstruct the investigation [was] short-lived.”
The rabbi’s son looks for help
It is not clear how long after the raid Rabbi Mendel Goldstein, 30, learned of the investigation into his father. But around July 2019, he formed the board to help guide the synagogue out of its financial and legal lurch.
Yisroel Goldstein was still the public face of Chabad of Poway at that point, and was widely celebrated for his role in the aftermath of the shooting. On June 26, he spoke to the United Nations about combating antisemitism. He also made trips to Poland and Brazil around that time. Vice President Mike Pence made an unannounced visit to the synagogue on July 11.
Gelwix, the new board member — who was the only person in the new leadership who agreed to an interview — said the rabbi’s son was at the time trying to right the synagogue’s ship but did not know the full scope of the case.
“My understanding is that he did not find it productive to discuss the ongoing investigation with his father,” Gelwix said in an hourlong phone interview Sept. 24.
The new board members’ relationships with Chabad of Poway were limited but meaningful. The rabbi was trying to thread a needle, Gelwix said: Find experienced professionals who would care enough about the institution to volunteer their time without tipping off any possible persons of interest in the investigation.
Gelwix fit the bill. Raised in a Reform family that frequented the synagogue, he was in the first preschool class at Chabad of Poway, but hadn’t been there more than a handful of times since. In recent years, his closest interaction with the Goldstein family was Mendel helping install mezuzahs at his home.
When Mendel approached him last July, Gelwix thought it sounded like a meaningful volunteer opportunity.
“I’m a Zionist, I’ve lived in Israel, I’ve supported the Jewish community, and I was coming from a career in public accounting where I was working 80-100 hours a week,” he said. “When he approached me I said, You know what, it would be good to help somebody in need in my community.”
Gelwix took on the work on the condition that he would have complete access to all of the organization’s records and accounts. Among his first steps was implementing weekly transaction reviews, monthly balance sheet reviews, and a rule that Rabbi Mendel Goldstein must clear any check larger than $1,000 with the board.
Joining Gelwix on the board were Hal Wilson, a local insurance agent, and Sam Dagan, an attorney. (Wilson and Dagan did not return requests for comment.) Though the board involves Mendel Goldstein in the organization’s decisions, Gelwix said the rabbi recuses himself on certain matters and was not present when the board leveled with the congregation.
“Whenever there’s a decision that needs to be made pertaining to his father, he’s recused himself,” Gelwix said. “We’ve had to make decisions that Rabbi Yisroel Goldstein would likely not be happy with, but he” – meaning Mendel — “hasn’t steered us.”
Two of those decisions pertain to Yisroel Goldstein’s old hilltop mansion, where another of his sons, Rabbi Shuie Goldstein, now lives. The Chabad of Poway-associated nonprofit that owns the home, Cong. Bnei Yisroel, was listed in the investigation and may be dissolved.
A rabbi residing in a synagogue-owned and board-controlled home as a parsonage is not uncommon, which is why Mendel Goldstein’s house, also owned by Cong. Bnei Yisroel, would remain the residence of the Chabad of Poway rabbi going forward.
But the board is currently determining whether it makes sense for Shuie Goldstein, who is the Friendship Circle’s rabbi, to live in such a big home. Chabad-Lubavitch headquarters did not say how often Friendship Circle rabbis receive parsonage benefits.
He added that if a forensic accountant determined the synagogue’s real assets were derived through fraud, the board might take another tack entirely.
“The answers to those questions are going to be strictly what we use to make our decisions about those properties going forward,” he said.
It was not until November 2019 — after the shooting, after Goldstein had met privately with President Donald Trump, after Pence’s visit to the synagogue, and after control of the nonprofits were transferred over — that Chabad of Poway issued a statement saying that its rabbi and founder was retiring at 58, and his son would be taking over.
“We are grateful for Rabbi Yisroel Goldstein’s 30-plus years of leadership, especially in the aftermath of the terror attack, and he will forever be a part of our community’s story,” read the statement, which was unattributed. “We are thrilled to have Rabbi Mendel Goldstein take the reins of our center, and have great confidence in his skills and ability to lead. He has served the community since 2015, and comes to the position with years of experience and a contagious enthusiasm.”
Thus, after 34 years at the Chabad center he founded — and having concluded an international speaking tour that he launched during the shiva period for Gilbert-Kaye — Goldstein retired without a single public word. Gelwix said in the interview that it was not the board that made the rabbi step down.
‘It sounds kind of fishy’
Oscar Stewart, an Army veteran who began attending services regularly at Chabad of Poway in 2018, was at the synagogue the day of the attack, and his courage in chasing the shooter out of the building probably saved lives.
When he learned of Yisroel Goldstein’s malfeasance, Stewart and his wife left the synagogue in disgust.
The Stewarts were not alone. A typical High Holiday service might draw 100 to 150 people, congregants said. This year’s services only averaged around 30 attendees, though the coronavirus also limited attendance, said one person who was present.
But a few are giving Mendel Goldstein and the board the benefit of the doubt, and sticking around.
“I don’t know that I’ll ever be able to process it, but I’m willing to keep an open mind about the board, about Mendel, and I’m willing to give both a chance,” said Scott Peck.
Peck, 62, said he was the first dues-paying member of Chabad of Poway when Rabbi Yisroel Goldstein first created it in 1986. He recalls when the congregation consisted of just a few people meeting in a shopping center storefront — “a dumpy old place where the plumbing didn’t work” — and Goldstein was driving a broken-down station wagon.
“He was 25, young and wide-eyed, extremely naive to the ways of the secular world,” Peck said. “A lovable guy. It was a different existence.”
When the shooting happened last April, Peck was out of town, and he has been coping with survivor’s guilt ever since.
The plea agreement redoubled his trauma. “It was numbing,” he said.
Peck is a CPA, and said Mendel Goldstein asked him to volunteer shortly after the plea agreement became public to audit the board’s work. So far, he said, it checked out.
But Stewart, who said he will not be back, questioned the synagogue’s ability to turn the page as long as the Goldstein family remained involved in its leadership.
“That’s kind of like saying Vito Corleone doesn’t run the family anymore, even though he’s still alive,” Stewart said, referencing “The Godfather.”
In the shooting’s aftermath, he served on the synagogue’s security committee, making plans for building improvements and the hiring of armed guards to serve at the front door.
But until the U.S. Attorney’s announcement, he was unaware of the investigation, and until he was contacted by The Forward, he was unaware of the board. If he was invited to the September meeting, he’d said he’d missed the email. Learning of the board and its commitment to transparency from a reporter didn’t make Stewart feel any better about the organization.
“It sounds kind of fishy to me,” he said.
The funeral of Lori Gilbert Kaye, shot in a San Diego synagogue. Image by Getty Images
Stewart, who said the Chabad shul figured in his decision to buy a house in Poway with his wife in 2018, plans to leave as soon as he can sell without taking a loss.
“Maybe that was the only reason we were there, was for me to be there on the 27th, or else it could have been a much worse situation,” Stewart said.
Gelwix emphasized that the board stood behind Mendel Goldstein, saying his knowledge of the community made him a good fit for the synagogue.
But some have noted there has been no formal apology to the congregation issued by either Goldstein or the board since July, when the guilty plea was announced. That Mendel Goldstein and Shuie Goldstein are living in homes bought by their father possibly with ill-gotten funds also continues to rankle. So does Yisroel Goldstein’s likely avoidance of prison.
“The rabbi will basically get away with murder, because he disclosed names of people and got himself off, basically,” Okonsky said, adding that she wanted to know how the elder Goldstein accumulated so much property during his tenure. “Honestly, I think he needs to serve some time.”
Gelwix acknowledged that he can’t force people to trust him — or tell them how to cope. But he said the synagogue will try to bring former congregants back into the fold.
“We knew that the answer to restoring the trust and the confidence of the organization was going to be through our work,” he said, “to show them that we’ve put together a group of people that aren’t ever going to allow what happened in the past to happen again.”
Louis Keene is a freelance writer and reporter. To email Louis, click here. Signal: 310 571 8480
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