Naftali Tzi Weisz, 61, the Brooklyn, N.Y.-based grand rabbi of the Spinka sect, pleaded guilty to conspiracy in August for his part in a scheme in which people made tax-exempt donations to charitable organizations and were later reimbursed for up to 95% of their contributions. The ruse allowed contributors to claim bogus tax deductions, even though most of their money was funneled back to them via international transfers, overseas accounts and an elaborate underground banking network that wound through Los Angeles' downtown jewelry district, according to authorities. In addition to Weisz, other religious leaders and businessmen have been convicted of taking part in the scheme and sentenced to prison terms ranging from four months to two years. The plot was revealed through an informant, wiretaps and hidden cameras, prosecutors said. Authorities say the return of laundered donations is rarely detected and difficult to prosecute because the groups involved are often secretive. ..... The head of an Orthodox Jewish sect was sentenced to two years in prison Monday for a tax evasion and money-laundering scheme that continued over a decade, spanned two continents, and cost taxpayers millions of dollars in lost revenue, authorities said.
Madoff musta been giving tax evasion seminars. Read on.
February 22, 2006
Scam artist laundered millions through fictitious companies; claimed to head a US-based tax-exempt charity raising money for a school in Israel.
Israeli emigre to the US, Abie Moskowitz, ran his tax fraud scheme like a well-oiled corporation. Moskowitz enlisted friends and relatives who owned businesses and persuaded them to write his checks under the guise of deductible expenses. He then laundered the money through bank accounts of fictitious companies he created, retrieved the cash, repaid his financiers and kept his cut. In just three years, Moskowitz and his cohorts were able to divert and conceal more than $8.6 million, some of which he squirreled away in accounts in Israel.
Moskowitz admitted as much when he pleaded guilty to fraud, tax and money-laundering charges before a US District Judge. The 56-year-old Brooklyn man was the last, and most significant, of the 12 defendants to plead guilty in a long-running fraud network that prosecutors suspect might have stolen millions more.
The case dated back nearly five years. A bank employee noticed irregular activity in some accounts and notified the FBI. Agents from the IRS and US Postal Service later joined the probe to help unravel an intricate web of shell companies and fraudulent tax returns.
Moskowitz emigrated from Israel to the US in 1965. He laimed to be part owner of Sea Jet Trucking/APA Warehouse Inc, a commercial shipping and storage company, until he sold his share around 2000, authorities said. He also owned a piece of American Poly Inc, a Brooklyn-based commercial packaging company. And he claimed to be president of Mosdot Nardvorna Mamar Mordechai, a US-based tax-exempt Jewish charity raising money for a school in Israel.
But it was shell businesses with names like Jersey York Baking and Madison Financial and Gateway, that made him rich, authorities said. Moskowitz admitted laundering money through the fictitious companies' bank accounts and mailing more than $378,000 to an unidentified contact in Israel. He acknowledged that he failed to report $1.9 million in personal income for the tax years 1998, 1999 and 2000 and owed more than $600,000 in income tax.
In the past two years, 11 other defendants have pleaded guilty to lesser charges in the Moskowitz scheme. Among them was Moskowitz's son, Sholom Moskowitz. Most were members of the close-knit Brooklyn Jewish community where Moskowitz lives and is well known, the prosecutor said.