wmlro.com: two years for decade-long professional money laundering scheme

There are few money laundering schemes so simple: a person sets up organisations and has them denoted as charities.

Then he says to people: give us your money, and claim tax relief on the payments. Then we'll give you up to 95% of your money back. And better still, we will put it into a bank account so you can use it whenever you like, or we'll get it back to you in cash.

And that's what they did: taxpayers dodged taxes due by claiming tax relief on the whole of the moneys they paid over to the schemes set up by Weisz and his accomplices.

The money was sent to Israel by the charities: Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn, and Mesivta Imrei Yosef Spinka, all based in Brooklyn.

There the money was paid into bank accounts set up for or on behalf of the tax evaders; or arrangements were made for the money to be made available to them in the USA.

This latter scheme used an informal value transfer system: jewellers, some in Los Angeles, would claim to make payment out to the tax evaders; claiming credit for the moneys in Israel.

Despite the fact that the entire scheme was set up for one purpose only: to facilitate the evasion of tax, Weisz secured a remarkable deal. He would, he said, plead guilty provided his jail term would be no more than three years; if the judge did not accept the offer, he would withdraw his guilty plea. That deal was publicised by the Central California office of the Department of Justice.That was in August this year, so making tainting any possible jury pool and making the prospect of a fair trial unlikely. Yesterday, HHJ John F Walter said "I am convinced that the rabbi never took a penny for himself." With that, he handed down a sentence of just two years jail.

The underground money transfer network involving various parties, some of whom operated businesses in and around the Los Angeles jewellery district, included Yaacov Zeivald, 44, of Valley Village, California; Yosef Nachum Naiman, 57, of Los Angeles; Alan Jay Friedman, 45, of Los Angeles; and Moshe Arie Lazar, 62, of Los Angeles, entered into plea agreements in which they admitted their roles in the illegal money transfer network.

In June 2008, Gabbai Moshe E. Zigelman, 62, Weisz' accomplice, pleaded guilty to conspiring with Weisz and was sentenced to two years in jail.

The charges were originally laid in December 2007 with 37 counts laid against Weisz and Zigelman.

At the bank in Tel Aviv, account manager Joseph Roth, now 78, and a Tel Aviv lawyer, Jacob Ivan Cantor, now 73, were also charged. Roth arranged loans for the tax evaders from the Los Angeles branch of the bank, with the loans secured on the deposits made in Tel Aviv, so allowing the taxpayers access to the money. Roth was arrested in the USA, Kantor was believed to be in Israel and has not been brought before the US Courts.

The indictment makes reference to "millions of dollars" but is not specific.

When the charges were laid, the DoJ said "The indictment charges Weisz and Zigelman with one count of conspiracy to defraud the Internal Revenue Service and other crimes, 19 counts of mail fraud, one money laundering conspiracy count, 11 counts of international money laundering, and one count of operating an illegal money remitting business. Zigelman is also charged with two counts of aiding in the preparation of fraudulent income tax returns. Roth is charged in both conspiracy counts; several mail fraud counts; and several international money laundering counts. Kantor is charged in both of the conspiracy counts and several international money laundering counts. Zeivald, Lazar, Naiman, and Friedman are charged in the main conspiracy count and with operating an illegal money remitting business. Zeivald is also named in one mail fraud count. If convicted, all of the defendants face substantial federal prison sentences.

In the money laundering conspiracy charge, five Spinka charitable organizations – Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn, and Mesivta Imrei Yosef Spinka, all based in Brooklyn – are named as defendants. These entities allegedly issued fraudulent receipts for bogus charitable contributions and were the beneficiaries of fees charged for transfers of funds as part of the money laundering conspiracy."