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Chabad of Poway Rabbi Pleads Guilty to Tax Fraud

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July 15, 2020
WASHINGTON, DC – MAY 02: U.S. President Donald Trump (L) listens to Congregation Chabad Rabbi Yisroel Goldstein of Poway, California, speak during a National Day of Prayer service in the Rose Garden at the White House May 02, 2019 in Washington, DC. Goldstein suffered defensive wounds when a gunman opened fire during the last day of Passover services at his synagogue, killing Lori Kaye. The White House invited leaders from various faiths and religions to participate in the day of prayer, which was designated in 1952 by the United States Congress to ask people “to turn to God in prayer and meditation.” (Photo by Chip Somodevilla/Getty Images)

Rabbi Yisroel Goldstein, who was shot during the Chabad of Poway attack in 2019, pleaded guilty on July 14 to what federal authorities called an “elaborate, long-term” tax fraud scheme.

According to prosecutors, the scheme involved Goldstein, who retired from the Chabad of Poway in November, accepting money from donors, and then returning 90% of the fraudulent donation to the donor while keeping the remaining 10%. Goldstein would then give the fraudulent donors bogus receipts that could be used for a charitable contribution tax write-off for the Internal Revenue Service (IRS). This scheme had been ongoing since the 1980s, prosecutors allege.

Additionally, the federal complaint states that Goldstein and others had been engaged in a corporate defrauding scheme, in which a donor would give money to one of Goldstein’s fake nonprofits, and a corporation would match that donation to the nonprofit. Goldstein would return the donation to the fraudulent donor while pocketing the corporate donation. Companies involved didn’t know they were being defrauded, according to the prosecutors.

In total, Goldstein accepted $6.2 million in fraudulent donations, causing the IRS to lose at least $1.5 million in revenue, the federal complaint states. Additionally, Goldstein helped at least 18 taxpayers to “fraudulently lower their tax liabilities,” according to the complaint.

The complaint also states that Goldstein defrauded $185,537 from the Federal Emergency Management Agency (FEMA) and the California Governor’s Office of Emergency Services (OES) through false claims of damage to the Chabad of Poway.

Goldstein was informed in October 2018 that he was under investigation for the scheme and he proceeded to warn others of the investigation. At least five other people have pleaded guilty to the scheme.

U.S. Attorney Robert Brewer said in a statement, “This case has brought us all a great deal of anguish because of the attack on Chabad of Poway. But whatever a defendant’s dire personal circumstances, or stature in the community, we will always seek justice, first and foremost.”

Goldstein, 58, could face up to five years of prison but Brewer’s office has said it will recommend probation for Goldstein. He will be sentenced in October.

Goldstein lost a finger in the April 2019 Chabad of Poway shooting, which resulted in one congregant dead. Goldstein subsequently met with President Donald Trump and warned of rising anti-Semitism at the United Nations.

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