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Fraud, betrayal and spy gear: Inside the messy battle for Chabad of Poway

A leaked document reveals Chabad leaders wrestling for control of the San Diego synagogue targeted in a 2019 mass shooting

A seven-hour mediation. A secret recording device. Accusations of extortion. These are the latest twists in the ongoing, ugly saga over control of the Southern California synagogue that survived a 2019 mass shooting only to face a federal fraud conviction of its founding rabbi.

A year after that rabbi, Yisroel Goldstein, was released from prison, the future of the synagogue, Chabad in Poway, remains hotly contested. Denying persistent accusations that he is trying to reinstate his father and evading financial oversight, Goldstein’s son, Rabbi Mendel Goldstein, refuses to yield to the demands of the Hasidic movement’s West Coast leadership that he step aside.

An Aug. 8 letter obtained by the Forward describes a contentious daylong hearing of a Chabad “court” the week prior that included veiled threats and the discovery of a fountain pen outfitted with spy gear.

The hearing called by Rabbi Boruch Shlomo Cunin, head of Chabad’s West Coast operations, was purportedly intended to resolve a yearlong stalemate over the younger Goldstein’s refusal to step down from the Poway pulpit, which he took over before the investigation against his father was made public. Cunin ultimately affirmed Goldstein’s firing by a lower-level Chabad leader, a decision three Chabad sources, speaking on condition of anonymity, said has been appealed to the movement’s top court in New York.

The letter reveals a shocking level of discord, distrust and deception between the Goldsteins and their supporters and the longstanding leaders of Chabad in California — and sets up a showdown between Chabad’s West Coast leadership and the movement’s headquarters in Crown Heights.

The July meeting aimed to settle three ongoing disputes between the Goldsteins and San Diego Chabad leadership: Mendel Goldstein’s status as shliach, or emissary, of Chabad of Poway; control of the Friendship Circle of San Diego, a charity spun off from the synagogue; and the oversight of both organizations. Also discussed was whether Mendel Goldstein was trying to engineer his father’s return to the synagogue, and whether the son knew of the father’s crimes before his arrest.

But the meeting was derailed — according to the letter and two people who attended the hearing but spoke on the condition of anonymity — by Cunin’s realization that a fountain pen left on his table by Goldstein’s representative, Rabbi Meir Kessler, was actually a recording device in disguise.

Kessler declined to comment.

Rabbi Yisroel Goldstein, left, and Rabbi Yonah Fradkin, with microphone, at the funeral for a Chabad of Poway congregant who was killed in the 2019 mass shooting at the synagogue. Photo by Sandy Huffaker/AFP via Getty Images

Cunin, who has grown Chabad to more than 200 outposts across California and Nevada since he became its West Coast chief in 1965, did not respond to an interview request. In the letter, Cunin said that Kessler mentioned “multiple times” during the meeting that the family intended to reinstate Yisroel Goldstein to the pulpit, something Cunin said was “entirely unacceptable for obvious reasons.”

Mendel Goldstein also refused to discuss the situation, instead responding to questions with a brief statement saying the synagogue would “seek remedy through the appropriate channels.”

“Chabad of Poway categorically denies that its representatives raised the plausibility of Rabbi Yisroel Goldstein reinstated [sic] as the rabbi of Chabad of Poway,” Goldstein wrote in a text message to the Forward. “We firmly believe that differences that may arise between rabbis ought to be arbitrated and or adjudicated at the appropriate venues, and the press is not one of those.” 

How we got here

Yisroel Goldstein, 62, was one of four people shot, one fatally, during Passover services at the shul in 2019. In July 2020, he pleaded guilty to fraud charges as part of a sprawling conspiracy that led to the convictions of a dozen people, including Goldstein’s brother; the rabbi of Chabad of UC-San Diego; and a few Chabad of Poway members.

According to Goldstein’s plea agreement, he used the synagogue and the Friendship Circle in multimillion-dollar tax- and grant-fraud schemes, pouring the ill-gotten funds into a lavish estate. He was sentenced to 14 months in a medium-security federal facility in New York, but was remanded to home confinement after three due to pandemic efforts to reduce prison populations. That confinement ended in January, according to the Bureau of Prisons.

Goldstein’s sons, Mendel and Shuie, respectively took over the synagogue and the Friendship Circle when their father retired in November 2019 — months before his crimes became public. When the FBI and IRS announced Goldstein’s guilty plea in July 2020, Chabad banished him from the movement.

Rabbi Yisroel Goldstein, his son Rabbi Mendel Goldstein and Ivanka Trump at a national day of prayer event at the White House on May 2, 2019. At the time, Yisroel Goldstein was cooperating with authorities investigating a multimillion fraud scheme he had run through the synagogue. Photo by Photo by Brendan Smialowski / AFP

Some members of the synagogue left, and people involved with the Friendship Circle demanded its separation from the shul. A volunteer independent board tried to bring transparency and accountability to the shul’s finances, but disbanded after a year, following Mendel Goldstein’s refusal to separate Friendship Circle as an entity. Mendel Goldstein’s father-in-law became the synagogue’s chief financial officer.

That led Rabbi Yonah Fradkin, who oversees a dozen Chabad outposts in the San Diego area, to propose installing a second rabbi, a move Mendel Goldstein rejected. Fradkin then demanded Goldstein’s resignation.

Shuie Goldstein, meanwhile, left the Friendship Circle last year with a severance estimated at about $145,000.

Seven hours, many accusations

During the hearing, according to Cunin’s account, Fradkin accused Mendel Goldstein of insubordination, citing an April 2022 letter in which Goldstein said that all Chabad of Poway matters would be “conducted and managed exclusively within the current governing structure without any external interference.”

Goldstein’s “refusal to cooperate apparently became well-known in the community,” Cunin wrote, “and, in Rabbi Fradkin’s view, continues to tarnish and undermine Chabad locally as well as throughout the region.”

Kessler, meanwhile, said at the hearing that the Goldsteins would reject any outcome that did not grant them full control of all Chabad of Poway properties in perpetuity, according to Cunin’s letter, which said that Kessler also expressed the family’s intent to ultimately reinstate Yisroel Goldstein as a shliach. Cunin noted that email correspondences preceding the meeting from Mendel Goldstein’s side had copied Yisroel as a recipient, a claim the Forward verified.

The claim that Mendel intends to reinstate his father was questioned by Steve Arnold, Chabad of Poway’s security director. In an interview, Arnold said that Mendel Goldstein has inquired about whether Yisroel’s presence at synagogue events might offend anyone, qualifying: “‘As long as there’s one congregant that would be upset, it just won’t happen.’”

Cunin, who was acting as a kind of arbitrator in the hearing, was himself involved in a federal investigation a decade ago. A judge ruled in 2014 that Chabad of California misappropriated about $272,495 in federal grants for security cameras, instead spending the money on payroll and utilities. The organization was fined $850,000 but nobody was charged criminally.

Rabbi Yonah Fradkin oversees more than a dozen San Diego Chabad institutions. Photo by Mario Tama/Getty Images

At the hearing, according to Cunin’s account, Kessler threatened to expose Fradkin — who is related to Cunin through marriage — for committing unnamed crimes. Cunin said he reprimanded Kessler in the meeting for mesirah — turning over a fellow Jew to authorities — and that Cunin’s lawyer, Seth Gerber, who was present at the meeting for unclear reasons, called the threats “extortion.”

It is unclear what Kessler might have been referring to. But court documents in the Yisroel Goldstein say that a person with the initials Y.F. accepted a donation of a non-existent Iranian Torah, valuing it at $1.2 million, sharing the proceeds of the write-off with the donor. The person is described as a “director of a separate religious congregation and community organization in San Diego.”

Y.F. was never charged or identified by the authorities.

Fradkin did not respond to a request for comment.

Spy gear

Then there is the matter of the spy pen. 

While Cunin was meeting with Rabbi Fradkin and his associate, Rabbi Moshe Lieberman, they noticed that Kessler had left a fountain pen on the table.

“Lieberman lifted the pen,” Cunin wrote, “unscrewed the bottom part of the pen, and showed me that instead of an ink cartridge, there were the electronic components of a covert transmitter/listening device.”

Kessler rushed over and grabbed the device, Cunin said. When asked to hand it over, Kessler instead destroyed it. Cunin wrote that Mendel Goldstein “confirmed he was aware” of the device and refused to disavow it.

“Although Rabbi Kessler claimed he did not record anything, Rabbi Kessler’s refusal to hand over the device to confirm no recordings were made — and his subsequent destruction of the device — belies his assertions,” Cunin wrote.

In the end, Cunin upheld Goldstein’s termination, instructing all parties to “facilitate a smooth transition for Chabad of Poway to move forward,” and ruled that the transfer of Friendship Circle was conducted properly.

That ruling has been appealed, however, and three Chabad sources, speaking on condition of anonymity, indicated that while Cunin is widely respected in the Chabad world, Goldstein has a sympathetic ear in national leadership.

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