Wife of Israeli celebrity rabbi attempts suicide as police question him


The wife of Israeli kabbalist Rabbi Yoshiyahu Yosef Pinto tried to commit suicide as her husband was being questioned by police.

The rabbi's wife, Rivka, was rushed to a Tel Aviv hospital on Sunday after reportedly overdosing on pills, Israel Radio reported. The questioning of Pinto was suspended on Sunday after three hours.

The couple were arrested and released to home detention late last week after allegedly attempting to bribe a police officer to get information about an investigation into alleged money laundering by the couple.

A former aide to Pinto, Ofer Biton, was jailed last month in the United States over immigration violations. U.S. officials reportedly have been scrutinizing Biton's fundraising activities for a U.S. congressman, Rep. Michael Grimm (R-N.Y.).

Biton had a falling-out with Pinto, whose supporters have accused Biton of embezzling funds from Pinto's organizations.

Avigdor Lieberman told he might be indicted


Israel Foreign Minister Avigdor Lieberman has been told that he may soon be indicted on charges of fraud, money laundering and break of trust.

The punishment for money laundering alone could be up to a 10-year prison sentence.

Attorney General Yehuda Weinstein informed the Kadima Party leader of the possibility on Wednesday, reported Haaretz.

The foreign minister has the right to a hearing in the effort to persuade the attorney general not to move forward with formal charges. If he takes that option, he will not need to resign from the cabinet. If he forsakes the opportunity, his political fate is not clear, according to the newspaper.

About a year-and-a-half ago, the Israeli police’s head of investigations and intelligence division, Yoav Segalovich, recommended that Weinstein charge Lieberman. Conversations on the matter have continued since then between the State Prosecution and the Attorney General offices. Segalovich recommended indicting Lieberman on charges of bribery, fraud, money laundering, breach of trust, witness harassment, and obstruction of justice, according to Haaretz.

Police have alleged that Lieberman was given more than 10 million in bribes from businessmen, which was laundered via shell companies and fictitious bank accounts overseas.

The police also have recommended indicting Lieberman for breach of trust in the case of Israel’s former ambassador to Belarus, Ze’ev Ben Aryeh, who showed Lieberman secret documents from the investigation against Lieberman, Haaretz reported.

N.Y. rabbi pleads guilty to money laundering


A leader of New York’s Syrian Jewish community pleaded guilty to laundering money through a religious charity.

Rabbi Saul Kassin, 79, pleaded guilty as part of a plea bargain Monday in federal court. He faces up to $250,000 in fines and could face up to five years in prison, though prosecutors reportedly will not seek a prison sentence as part of the plea deal.

Kassin was arrested in July 2009 by the FBI along with 43 other rabbis from Syrian Jewish neighborhoods in Deal and Elberon, N.J., as well as Brooklyn, N.Y. The mayors of three New Jersey towns, a deputy mayor and a state assemblyman were also arrested.

Kassin confessed to using his Magen Israel Society to launder money given to him by Solomon Dwek, a real-estate tycoon and the son of a prominent Syrian rabbi who was arrested in 2006 for a $50 million bank fraud. Under the system, Kassin and the charity kept 10 percent. Dwek later became a federal informant.

The Spinka money trail — and the informant who brought them down


The first snow flutters hesitantly in Brooklyn. Men wearing fur streimel hats and women wearing sheitls walk briskly past the corner of 15th Avenue and 58th Street in Boro Park as if nothing extraordinary has happened here.

And why not? The kosher shops of this self-contained ultra-Orthodox neighborhood — practically a city onto itself — are still a few blocks down, and here on this bleak corner, there are only three orange school buses parked in front of a four-story, dark-red brick building, which sits on a residential street, where tall, narrow houses nearly overlap. The structure (photo below) is rather nondescript and unimposing — garbage bags are piled haphazardly by a front gate, bars protect the windows, young boys can be heard chanting from behind the locked door and a white sign with sky blue Hebrew lettering reads: “Yeshiva Imrei Yosef Spinka.”

yeshiva imrei yosef spinka

A buzzer sounds. The door opens. No one asks who rang the bell. Up the four steps, a reception window sits empty. Hazy yellow fluorescent lights illuminate the narrow hallways adorned with graying yellow paint and frayed industrial carpeting. If there are millions — or even thousands — of dollars going to the Spinka yeshiva, it certainly doesn’t seem like it’s coming here.

This despite the fact that on Dec. 19, 2007, the U.S. Attorney General’s Office filed an indictment in the U.S. District Court for the Central District of California naming the Chasidic yeshiva and four other Spinka organizations, as well as eight people, in a multimillion dollar tax fraud and money-laundering ring that stretched from Brooklyn to Los Angeles to Israel and elsewhere.

Two of those indicted are Rabbi Naftali Tzi Weisz, 59, the Grand Rabbi of Spinka, a Brooklyn-based Chasidic sect, whose yeshiva is in this undistinguished building, and his gabbai (assistant), Moshe Zigelman, 60.

Weisz is just one of a number of Grand Rebbes of Spinka, a Chasidic sect that yaacov zievaldoriginated in Romania in the 19th century. He is the great-great-grandson of the founding rabbi, and one of about a dozen Grand Spinka Rebbes who live in Boro Park or Williamsburg, in Brooklyn, or Bnei Brak and Jerusalem in Israel.

Four Los Angeles men were among those charged with taking part in the scheme: Yaacov (Yankel) Zeivald, 43, a self-described scribe (sofer) from Valley Village (photo, right); Yosef Nachum Naiman, 55, the owner of Shatz Et Naiman, d.b.a. Jerusalem Tours; Alan Jay Friedman, 43, a businessman from Pico-Robertson who sits on the board of the Orthodox Union; and Moshe Lazar, 60, owner of Lazar Diamonds, a Los Angeles jewelry company.

Although many of the details of the case have not yet been revealed — a trial date is set for Feb. 12, but the defendants’ lawyers say it will be postponed at least a year — what is emerging from the indictment, the search warrant and other documents of public record is a complex money-laundering scheme. According to the documents, people donated money to the Spinka institutions but then received 80 percent to 95 percent of their donations back, yet wrote off the full amount on their taxes.

These charges are just the beginning of a much larger case, Daniel J. O’Brien, an assistant U.S. attorney in the major frauds section, based in Los Angeles, said in an interview with The Journal.

“There were many other people that contributed in this fashion that would be the subject of government investigations,” O’Brien said.

While O’Brien said he has documentation that the Spinka institutions took in about $750,000 through the scheme — then writing receipts for $8.7 million — in 2007 alone, the assistant U.S. attorney believes the fraud has been going on for decades: “I believe this goes on beyond living memory,” possibly for generations.

This is certainly not the first time an ultra-Orthodox sect has been accused of attempting to break the laws of the secular government — aramos, or schemes, were perpetrated over the centuries in the shtetls of Europe. In the last decade, arrests have occurred in religious communities in Brooklyn, Lakewood, N.J., and upstate New York.

However, this particular case has shocked Los Angeles’ ultra-Orthodox community, not only because Los Angeles had largely been exempt from such cases in the past, but also because some of the city’s prominent members have been charged as being at the center of the scheme.

As a result, the case has sparked a fierce debate about the type of behavior that is acceptable for observant people and what type of religious community Los Angeles would like to be. But there’s also debate about the laws of a moser, an informant, because one person who was not charged was the primary source of information for the federal case — though he allegedly started out as one of the perpetrators.

THE BEGINNING

On June 29, 2004, the U.S. Securities and Exchange Commission filed civil fraud charges against Robert A. Kasirer and four executives of Heritage Healthcare of America, which sold $131 million in bonds to 1,800 investors in 36 states from 1996-1999, claiming that the money would be used to fund 10 health care facilities. In October of that year, Kasirer approached the federal government and “expressed a desire to plead guilty to criminal charges arising out of the investigation and agreed to reveal other criminal conduct he and others had committed, with a view that any sentence he might receive would be reduced,” according to an affidavit for a search warrant submitted by FBI Special Agent Ryan Heaton on Dec. 18, 2007.

Although the search warrant affidavit identifies Kasirer only as “confidential witness (CW-1)” and the recent grand jury indictment refers to a witness named only as RK, the companies in the affidavit attributed to CW-1 and RK are run by Kasirer, and several members of the Los Angeles community, who asked for confidentiality, have confirmed his involvement.

In 2004, under federal surveillance, the informant identified in the transcript as CW-1 resumed activities he admitted to having conducted with the Spinka since 1990, in which “he caused several million dollars in contributions to be mailed to the tax-exempt organizations operating within the umbrella of Spinka,” he is quoted in federal documents as having told the FBI.

Grand Rabbi pleads not guilty


LOS ANGELES – The Grand Rabbi of Spinka, head of a Brooklyn-based Chasidic sect, and five other men pleaded not guilty Monday to federal charges of tax evasion and money laundering.

Naftalie Tzi Weisz, the 59-year old grand rabbi, and the other accused appeared in U.S. District Court in downtown Los Angeles before U.S. Magistrate Judge Alicia Rosenberg, who set Feb. 12 for trial.

A federal grand jury indicted the men and five Spinka charities on Dec. 18 on charges of participating in fraudulent kickback scheme that cheated the Internal Revenue Service of at least $33 million.

In the alleged scheme, donors to Spinka charities were refunded up to 95 percent of their donations, who then claimed the full amounts as tax deductions.

The kickbacks were laundered through the Mizrahi Bank in Tel Aviv and businesses in the Los Angeles jewelry district, according to prosecutors.

Other named defendants are Weisz’s gabbai, or assistant, Moshe Zigelman, 60, also of Brooklyn, Joseph Roth, 66, of Tel Aviv, and three Los Angeles area residents, Yaacov Zeivald, 43, Alan Jay Friedman, 43, and Yosef Nachum Naiman, 55.

Weisz and Zigelman allegedly made more than $750,000 from the transactions.

All are free on bond, except Roth, an assistant manager at the Mizrahi Bank, who is considered a flight risk to Israel by the prosecution. Roth had been granted a $1.9 million bond by another magistrate, but who stayed the decision so that government prosecutors could draft an appeal. The defendants face lengthy terms in prison terms if convicted of the charges.


Local Orthodox community in shock after arrest of Spinka rabbiBy Amy Klein, Religion Editor

The Los Angeles Orthodox Community went into shock this week over the federal indictment of four of their own. They were among eight men accused of running a tax fraud scheme funneled through a Brooklyn Yeshiva.

On Dec. 19, Los Angeles authorities arrested six people, including Naftali Tzi Weisz, 59, the grand rabbi of Spinka, a Brooklyn-based Hasidic sect, on charges of creating a money-laundering scheme that worked through financial networks in Los Angeles and Israel. Two of the eight remained at large as of Dec. 21. The four men arrested have been released on bail.

The 37-count indictment against the rabbi, who is being represented by well-known attorney Donald Etra, alleges that he and his gabbai (assistant), Moshe E. Zigelman, 60, raked in more than $750,000 by soliciting millions of dollars in contributions to Spinka charities while promising to secretly return up to 95% of donations.

Four Los Angeles men were among those charged with taking part in the scheme: Yaacov (Yankel) Zeivald, 43, a self-described scribe from Valley Village ; Yosef Nachum Naiman, 55, the owner of Shatz Et Naiman, dba Jerusalem Tours; Alan Jay Friedman, 43, a businessman, also from Los Angeles. All three were released on bail on Wednesday. Moshe (Marvin) Arie Lazar, 60, the owner of Lazar Diamonds here, is believed to be in Israel, according to the federal officials.

Naiman, Friedman and Lazar all reside in the Hancock Park/Fairfax ultra-Orthodox neighborhood, although they are not all Hasidic. Friedman sits on the Board of Directors of the Orthodox Union.

A fifth Angeleno, named in the indictment as R.K., was a member of the conspiracy from 1996 through October 2004 and then became a cooperating witness for the government. The Journal could not confirm at press time the alleged identity of R.K., which was being circulated in the Orthodox community.

“The Fraudulent Charitable Contribution Scheme,” according to the grand jury, began in 1996 and continued through 2007, where the defendants would secretly refund to certain Spinka contributors from 80 to 95 percent of their nominal contributions to Spinka charitable organizations,” the indictment said. “In this manner, the conspiring contributors could fraudulently claim as tax deductions the full amounts of their nominal contributions tothe Spinka charitable organizations, while having actually contributed as little as 5 to 20 percent of the amounts of the claimed deductions. The conspiring contributors could also usethe fraudulent Spinka charitable contributions to promote other unlawful activity including, in the case of co-conspirator R.K., the fraudulent concealment of assets from the SEC.”

In Los Angeles’ tight-knit ultra-Orthodox community in the Fairfax-Beverly, Hancock Park neighborhood, people were quietly talking about the case and were extremely upset that members of their community may have been involved in such a “non-religious” activity.

“One thing is clear: The Orthodox community deplores any attempt to defraud the government of the United States, and there is no excuse for it, and there’s no rationalizations that are acceptable,” said Rabbi Meyer H. May, president of the Rabbinical Council of California. “It’s against the Torah and it’s against our moral foundation. At the same time, regarding these specific individuals, they should be allowed to have a fair trial, as everyone is innocent until proven guilty.” He also stressed that people should beware of lashon hara, or gossip, of discussing this case, and to keep in mind that there are wives and children and family members who might also be hurt.

But whatever the verdict on the accused, Rabbi May said this should be a wake-up call to the community. “The community should look deeply inside itself to examine its values, its commitment to truth, and its understanding of what God really wants us to be and how he wants us to act. We are here in this world to sanctify the name of God and not to denigrate it.”

He stressed that the accused are individuals, not representatives of the Orthodox or Hasidic community. “Ninety nine percent do pay taxes correctly, do abide by the law, do take their positions as citizens of the United States seriously and ethically.”

This is not the first time a Hasidic sect has been using their institution to funnel money. In January 2001, outgoing president Bill Clinton controversially pardoned four Sqverer Hasidim who were serving prison sentences of up to 6 1/2 years for bilking $40 million worth of student Pell grants and loans from government sources for a phony school in the Hasidic community of New Square, N.Y.

Our Gang


A reputed gangster who calls himself “a simple Jew from Kiev” has emerged as the central suspect in an international bank-fraud probe that investigators term the biggest money-laundering case in history.

The case involves an apparent scheme by Russian mobsters to launder billions of dollars in criminal proceeds through one of America’s oldest and most respected banks, the Bank of New York. The FBI’s yearlong investigation into the scheme was disclosed by the New York Times in a series of articles in late August.

Beyond the Times’ disclosures lies a far more complex story, reported piecemeal in a variety of publications here and abroad. Together they tell a hair-raising tale of international crime and intrigue by reputed crime boss Semyon Mogilevich and his so-called “Red Mafia.”

Mogilevich’s mob is said to be the largest and most dangerous criminal organization to emerge from the breakup of the Soviet Union; it’s engaged in arms dealing, drug smuggling, prostitution, contract murders and international art theft.

The gang has been described as resembling traditional Italian mafia groups in its hierarchy, brutality and reliance on family and ethnic ties. Most of its members are Jewish.

The money-laundering and related allegations, though, lift Mogilevich to a level of sophistication and influence rare in organized crime. They also hint at the magnitude of threat posed by Russian organized crime, both to Russia and the world at large.

Britain, in particular, has been investigating Mogilevich’s group for more than four years, seeking to unravel a worldwide network of shell companies implicated in money-laundering, contraband sales, stock manipulation and investor fraud. It was Britain’s National Criminal Intelligence Service that tipped off the FBI last year to Mogilevich’s apparent relationship with the Bank of New York.

Switzerland is also investigating the gang, on suspicion that it helped launder millions of dollars through Swiss banks for Russian government officials. Those cash movements began just before the August 1998 ruble devaluation that led to Russian financial chaos. Some say Kremlin officials traded on their inside knowledge of policy plans, bleeding the country.

Part of the laundered money — at least $200 million, by some accounts — may have come from International Monetary Fund aid. The IMF is now facing criticism in Washington for sloppy oversight. That, in turn, could hurt the presidential hopes of Vice President Al Gore, a key architect of the IMF’s Russia policies. The GOP-led House Banking Committee is holding hearings on the allegations later this month.

Others whose names have surfaced in the mushrooming probe include several so-called “oligarchs,” the business tycoons, many of them Jewish, who control much of post-communist Russia’s privatized industry. Those mentioned include Mikhail Khodorkovsky, a leading banker and oil executive; Boris Berezovsky, formerly a ranking Yeltsin aide; and Vladimir Goussinsky, president of the Russian Jewish Congress. All three headed Russian banks that have been implicated in the Mogilevich investigations.

Another “oligarch” implicated is Konstantin Kagalovsky, a close ally of Khodorkovsky. His wife, Natasha Gurfinkel, headed Bank of New York’s East Europe operations until she was suspended last month.

Nobody has formally been accused of any wrongdoing.

Russian Jewry experts fear the allegations may help fuel Russia’s already rampant anti-Semitism, by seeming to confirm extremist myths about Jewish “rape” of Mother Russia. All told, Mogilevich’s mob may have looted as much as $15 billion from the Russian economy in the last few years. “It can’t help but have an impact,” said Isabella Ginor, a leading Israeli analyst of post-Soviet affairs.

Semyon Yukovich Mogilevich, 53, was born in Kiev and graduated from the University of Lvov with a degree in economics. An Israeli citizen since the early 1990s, he currently operates from Hungary, where he is married to a local woman.

He has been known to law enforcement authorities for decades, and is a familiar figure in the Russian media. In the West, though, he was virtually unknown until May 1998, when he was profiled in a lengthy article in the Village Voice by investigative reporter Robert Friedman.

Friedman went into hiding shortly afterward, at the urging of the FBI, which told him Mogilevich had taken out a $100,000 contract on his life. He is currently writing a book about Russian organized crime.

As described by Friedman, Mogilevich first became involved in petty crime in Moscow in the 1970s. He made millions in the 1980s by bilking Jews leaving for Israel, promising to sell their valuables for them after they left, then pocketing the proceeds.

He spent the 1990s allegedly building his Red Mafia from his new base in Budapest, sending lieutenants to acquire legitimate companies in England, Canada, Australia, the United States, the Caribbean and elsewhere, then using them as covers for his illegal activities.

Activities cited by Friedman include a sale of $20 million in stolen East Bloc weaponry to Iran, the theft and resale of Torah scrolls, a scheme to dump American toxic waste in Chernobyl — in cooperation with the Genovese crime family — and a phony antique restoration shop that took in Russian art treasures and sent fakes back to the owners, while the originals were secretly sold at Sotheby’s in London.

Britain appears to have been a favorite base for Mogilevich’s financial schemes. In 1995, British authorities shut down a firm he had created there to launder funds from his worldwide criminal activities. In 1997, authorities began investigating a far more complex scheme, in which he acquired a Hungarian magnet factory, incorporated it in Philadelphia, then took it public on the Toronto Stock Exchange in 1994. Hundreds of millions of dollars worth of stock was sold, yet few magnets were produced. Federal authorities, tipped by Britain, shut the firm down for securities fraud last spring.

The magnet probe led British investigators to Benex, a London-based firm allegedly controlled by Mogilevich. It was set up in March 1998 for the sole apparent purpose of transferring funds out of Russia.

Benex’s only officer, reputed Mogilevich lieutenant Peter Berlin, is married to Lucy Edwards, the Bank of New York officer who was fired last week for her apparent role in the money-laundering scheme.

Edwards, born Ludmilla Pritzker in Leningrad, has declined to comment so far. Berlin has disappeared, and knowledgeable observers suggest he may turn up floating in the Thames.

As for Mogilevich, he granted an interview to a Moscow newspaper this week and insisted that the only money he ever laundered was $5 left in a shirt on wash day. The whole affair, he claimed, is “the raving of the FBI.”


J.J. Goldberg writes a weekly column for The Jewish Journal.