Rabbi Yisroel Goldstein Sentenced to Prison for Multi-Million Dollar Fraudulent Schemes | USAO-SDCA
Deputy Attorneys for the United States Valerie H. Chu (619) 546-6750 and Michelle L. Wasserman (619) 546-8314
SUMMARY OF THE PRESS RELEASE – January 4, 2022
SAN DIEGO – Rabbi Yisroel Goldstein, former director of Chabad of Poway, was today sentenced in federal court to fourteen months in custody for his multi-million dollar schemes to defraud the Internal Revenue Service, several Fortune companies 500 from San Diego, and several public and private agencies. He was also ordered to pay compensation totaling $ 2,834,608.
According to his plea deal, while Rabbi Goldstein was director of the Poway synagogue, he received at least $ 6.2 million in bogus contributions to the Chabad and affiliated charities and secretly repaid up to 90% of the donations. to “donors”. After Rabbi Goldstein provided these donors with bogus receipts, they illegally claimed huge tax deductions for those non-existent donations, and the rabbi kept about 10% – over half a million dollars in the past. fraud – for himself. The tax losses for the IRS were over $ 1.5 million.
Rabbi Goldstein also admitted that he defrauded three different Fortune 500 companies by tricking them into matching so-called charitable donations from their employees. Together with the employees, Rabbi Goldstein fabricated receipts and then secretly returned their bogus “donations”. This allowed employees to claim tax deductions for fully fabricated donations and allowed Rabbi Goldstein to raise matching funds from companies, including some that were double their employee donations. Rabbi Goldstein helped orchestrate this scheme with at least six taxpayer-employees and two other associates who helped recruit new donors or hide the true recipient of the funds. In total, Rabbi Goldstein defrauded businesses of at least $ 144,000 and helped taxpayer-employees claim almost as many tax-deductible fictitious charitable contributions from the IRS.
Rabbi Goldstein admitted that he also helped his brother Mendel Goldstein conceal around $ 700,000 in income by allowing him to use Chabad bank accounts to deposit his income, thereby hiding it from the IRS. Like his cup, Rabbi Goldstein kept 10 percent of this individual’s income, or more than $ 70,000.
Regardless of the tax evasion program, Rabbi Goldstein and another accused, Alexander Avergoon, used false information and fabricated invoices and other documents to pretend they were eligible for emergency funds, grants or donations and private loans. These frauds against the Federal Emergency Management Agency (FEMA), the California Governor’s Office of Emergency Services (Cal OES) and private foundations have resulted in losses for these programs of at least $ 860,000.
According to sentencing documents, the United States Attorney’s Office recommended departing from sentencing guidelines for Goldstein due to his cooperation against other people and the extraordinary events he suffered in as a victim of the April 27, 2019 shooting at the Chabad in Poway.
On sentencing, US District Judge Cynthia A. Bashant commented, “You’ve trained so many worshipers. Many of these individuals thought they were committing these crimes for the benefit of the Chabad or the synagogue in general, when in fact it was for your benefit. I cannot ignore it. … I think the time in detention is important. It’s important to send a message to the community, and it’s important to send a message to yourself.
“Yisroel Goldstein has exploited his position and stature as a religious leader to commit well-planned and carefully executed crimes of greed,” said US Attorney Randy Grossman. “While his serious criminal conduct was under investigation, the rabbi was the victim of a devastating attack on the synagogue he was leading. Today’s sentence explains these extraordinary circumstances and the mission of our office to always seek justice. Grossman thanked the prosecution team, the FBI and the IRS for their excellent work on this case.
“The defendant used the tax-exempt status of the Chabad of Poway as a religious organization to compile millions of dollars in” fraudulent “donations,” said Suzanne Turner, special agent for the FBI. “This ploy allowed Rabbi Goldstein to fill his pockets; reward its false “donors” by reimbursing their contributions; and provided receipts allowing “donations” to be written off as charitable contributions, all within the program. The FBI will continue to stamp out fraud disguised as charitable giving, which ultimately hurts organizations that rely on the generosity of donors. “
“Rabbi Goldstein veiled more than $ 2.8 million in fraudulent schemes he carried out with at least ten other co-conspirators by exploiting the nonprofit statutes of the Chabad of Poway and the Friendship Circle of San Diego,” organizations entrusted to him to serve the community. said Special Agent in Charge Ryan L. Korner of the Los Angeles Field Office of the IRS Criminal Investigation. “IRS Special Agents were proud to work alongside the FBI and the United States Attorney’s Office in this multi-million dollar tax and subsidy investigation that exposed decades of illegal conduct. In addition to holding Rabbi Goldstein responsible for deceiving American taxpayers and businesses for personal gain, my fervent hope is that today’s conviction brings closure and healing to all who have been affected by his crimes.
Rabbi Goldstein was ordered to attend a federal facility by noon on February 23, 2022.
RESPONDENT File number 20CR1916-BAS
Israel Goldstein Age: 60 poway
SUMMARY OF EXPENSES
Conspiracy to defraud the United States and commit wire fraud, in violation of Title 18, USC 371
Maximum penalty: five years in prison
Federal Bureau of Investigation
Tax Service – Criminal Investigation