$500,000 Judgment in Phony Charities Case
MANHATTAN (CN) - A Brooklyn man was slapped with a felony tax fraud conviction and a $500,000 civil judgment for swiping donations through bogus charities in Israel that he claimed were intended for terror attack victims, cancer patients and the poor.
The judgment settles a 2013 civil lawsuit against Yaakov Weingarten filed in Kings County Court by Attorney General Eric Schneiderman, who claimed Weingarten and his wife, Rivka, stole "hundreds of thousands - if not millions" of dollars in donations by posing as synagogues and other organizations seeking donations.
The judgment bars Weingarten and his cronies, Simon Weiss and David Yifat, from conducting fund-raising activities New York State.
"We are committed to fighting to protect everyday New Yorkers, particularly those who want to use some of their hard-earned money to support charitable causes, because there has to be one set of rules for everyone," Schneiderman said in a statement. "My office will use all the tools at our disposal to protect New Yorkers from unscrupulous fundraisers for sham charities."
Weingarten pleaded guilty May 19 to criminal tax fraud in the third degree, a Class D felony.
He has already paid $90,000 in restitution to the state Department of Taxation and Finance, Schneiderman said.
On June 23, Weingarten, 53, was sentenced to five years probation.
Weingarten admitted that between June 2007 and June 2012, he solicited charitable donations for multiple entities, many of them bogus, to take in donations from thousands of donors.
He also admitted that from January 2009 through December 2011, he paid himself over $270,000 from bank accounts set up in the names of the fake charities to fund mortgages on his two homes, make home improvements, and to pay his cable and electricity bills.
He then failed to report that money as income on his tax returns from 2009-2011.
The state's civil lawsuit accused Weingarten and his associates of running a bogus storefront in the Midwood neighborhood of Brooklyn, and that the trio raised donations for 19 sham charities from Jewish donors throughout North America, claiming they were for Israeli charitable causes.
Large amounts of the money raised -- an estimated $2 million -- was then withdrawn from charity bank accounts, the lawsuit claimed.
Some of that money was used to pay workers operating Weingarten's telemarketing boiler room. Other funds were used by Weingarten and his family to pay for personal expenses, such as mortgages, dentist bills, car loans, and home improvements.
About $360,000 of the penalty will go to the United Jewish Appeal/Federation of New York, and will be distributed equally to pediatric hospital Schneider Children's Medical Center of Israel and United Hatzalah of Israel, an Israeli volunteer emergency medical services organization. The rest is for penalties and costs to New York State.