LOS ANGELES, Dec 20, 2007 (UPI via COMTEX) -- The leader of an Orthodox Jewish sect was arrested on a 37-count indictment involving tax fraud and money laundering in Israel, New York and Los Angeles.
Federal prosecutors say Grand Rabbi Natfali Tzi Weiz and his assistant Gabbai Moesh E. Zibelman solicited "tens of millions of dollars" in donations to charities organized by the Spinka Hassidic Jewish group on the pledge of a 95 percent refund to contributors and tax deductions on the fraudulent donations, the Los Angeles Times reported Thursday.
The Spinka sect generated $700,000 profit from nearly $9 million in donations in 2006.
The indictment charges the two men with conspiracy to commit fraud against the Internal Revenue Service, 11 counts of international money laundering and one count of illegal business activities.
The indictment claims they laundered donations through networks in New York and Los Angeles and had donors pay a money laundering fee to funnel funds through Spinka to secret bank accounts in Israel.
Officials charged six associates with connections to the scheme and named five Brooklyn-based Spinka charities in the case.