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December 21, 2007

Jewish Group Accused of Money Laundering Through False Charity

The leader of an Orthodox Jewish sect, Grand Rabbi Naftali Tzi Weisz of the Spinka religious group, was arrested Wednesday on 37 counts of alleged tax fraud and money laundering, reports The Los Angeles Times.

Federal prosecutors say that Mr. Weisz and his executive assistant, Gabbai Moseh E. Zigelman, who was also arrested, solicited “tens of millions of dollars” in contributions to Spinka charities and secretly promised contributors that they would receive up to 95 percent of their donations back. The contributors then illegally claimed tax deductions on their fake donations.

According to the indictment, Mr. Zigelman solicited close to $9-million in 2006 alone and kept $700,000 for the Spinka group after donors were repaid. The two men allegedly reimbursed contributors through a complex underground network that included businesses in and around L.A.‘s jewelry district.

Six associates, four of whom were arrested Wednesday, were also charged in connection with the scheme. Five Spinka charities based in Brooklyn are also accused of making out false receipts for donations as well as for receiving the money-laundering fees.

The article did not contain any response from the people who were charged with money laundering.

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