Rabbi is jailed for £5m fraud

By Tom Tugend, April 7, 2009
Follow The JC on Twitter

A Brooklyn rabbi has been jailed for two years after pleading guilty to a tax fraud and money laundering scheme.

Rabbi Moshe Zigelman was key to a conspiracy which used five charities of the ultra-Orthodox Spinka group as fronts. Contributors received receipts for large sums which they wrote off on their tax returns. Then they were secretly repaid most of the cash.

In 2006 alone, Zigelman helped solicit more than $8.5 million (£5.3m), of which just $750,000 (£500,000) was kept by charities.

Zigelman, 61, worked for Rabbi Naftali Tzi Weisz, leader of the Chasidic sect, who will go on trial in June alongside four Los Angeles businessmen. Israeli banker Joseph Roth was previously sentenced to 14 months.

Spinka is a Chasidic group which originated in Romania and has followers in Israel, Europe and Brooklyn.

At the sentencing, Zigelman expressed remorse. Judge John F Walter said: “It’s difficult to understand how such an individual could lose his moral compass.” More than 50 Spinka adherents were present for the sentencing, many of whom had flown in from Brooklyn, including Zigelman’s wife and ten of his 12 children.

    Last updated: 10:42am, April 7 2009