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Former Poway rabbi sentenced to prison for multi-million dollar fraud schemes

The former rabbi of a Poway synagogue who was wounded during an anti-semantic shooting was sentenced on Tuesday to 14 months in custody for a multi-million dollar fraud schemes that lasted several years.
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The former rabbi of a Poway synagogue who was wounded during an anti-semantic shooting was sentenced on Tuesday to 14 months in custody for a multi-million dollar fraud schemes that lasted several years. 


The former Chabad of Poway Rabbi Yisroel Goldstein, 60, was involved in what prosecutors have termed a “90/10” fraud. Donors would regularly make charitable contributions to the Chabad of Poway or one of it’s affiliated nonprofits to be written off their taxes. Donors would receive 90 percent back and Goldstein would keep10 percent. According to prosecutors, the Internal Revenue Service (IRS) lost more than $1.5 million. 

“I stand here today, my head bowed in shame, remorse and disappointment over the crimes that I have committed to God and mankind,” Goldstein said while addressing the court Tuesday.

The Judge ordered Goldstein to pay nearly $3 million in restitution to the victims, which include the IRS and San Diego Fortune 500 companies, and multiple public and private agencies that matched donations their employees made to the Chabad. The amount was shared with several others who were prosecuted as participants. 

According to the FBI, Goldstein, was involved in a number of fraudulent schemes exploiting tax loopholes, corporate benevolence and government grant assistance. Prosecutors said he personally earned at least $620,000 from the conspiracies. 

In total, Goldstein defrauded the companies out of at least $144,000, and helped the taxpayer-employees to claim nearly as much in false tax-deductible charitable contributions to the IRS.

According to prosecutors, Goldstein admitted that he also helped his brother Mendel Goldstein conceal approximately $700,000 in income by allowing him to use Chabad bank accounts to deposit his income, thereby hiding it from the IRS. Goldstein profited over $70,000, which is 10 percent of this individual's income. 

According to the U.S. Attorney General, Goldstein and ex-real estate agent Alexander Avergoon used false information and fabricated invoices and other records to pretend to be eligible for emergency funds, grants or donations, and private loans in a separate scheme. These frauds on the Federal Emergency Management Agency (FEMA), the California Governor’s Office of Emergency Services (Cal OES), and private foundations resulted in losses to these programs of at least $860,000.

Goldstein was removed from the Chabad when he plead guilty in 2020 to federal fraud charges. Both the U.S. Attorney's Office and prosecutors recommended home confinement because of his cooperation against other individuals, and because of the extraordinary events he suffered as a victim of the April 27, 2019 shooting at the Chabad of Poway. 

In imposing sentence, U.S. District Judge Cynthia A. Bashant said, “You dragged down so many congregants.  Many of those individuals thought that they were committing these offenses to benefit the Chabad or the synagogue in general, when in fact it was to benefit you.  I just can’t ignore that. … I think time in custody is important.  It’s important to send a message to the community, and it’s important to send a message to you.” 

The judge rejected those recommendations.Instead, Goldstein must surrender to authorities by Feb. 23 to begin his sentence at the FCI Otisville, a facility in New York state which Goldstein’s attorneys said was more accommodating for practicing Jews.