BROOKLYN, N.Y. (CN) - A Brooklyn man and his cronies swiped "hundreds of thousands - if not millions" of dollars in donations intended for Israeli charities, New York's attorney general claims in court.
Attorney General Eric Schneiderman sued Yaakov Weingarten, his wife Rivka Weingarten, and two of Weingarten's principal employees, David Yifat and Simon Weiss, in Kings County Supreme Court. Their last known addresses were in Brooklyn, except for Weiss, who lived in Queens, according to the lengthy complaint.
Also sued are at least 19 entities Weingarten has run for at least the past five years - some of them nonprofits, some corporations organized under the Religious Corporations Law - to prey on a "vulnerable public's charitable instincts, and in particular the charitable impulses that many persons of the Jewish faith have for Israel," New York says in the complaint.
Weingarten and his employees "use deceptive and highly aggressive tactics to raise millions of dollars from donors," the lawsuit states, "ostensibly for Israeli charitable causes such as Emergency Medical Services programs and programs for terror attack survivors, cancer victims, the sick and the poor.
"The reality, however, is that the monies raised in the name of these distinct charitable causes are deposited instead into one or more than 35 bank accounts controlled by Weingarten and Weiss, often not even in the name of the charity to which the donor contributed, and then freely exchanged among these different accounts, creating a vast slush fund that Weingarten then uses to pay hundreds of thousands, if not millions, of dollars of his and his family's personal expenses."
Weingarten and Weiss "quite literally treat the charities' monies as their own, to the point that they write checks from entity bank accounts that bear their own names as the payor," the attorney general says.
The defendants commingled funds, "and the enormous amounts of cash withdrawn from these commingled assets are designed to obscure just how much of the public charitable donations have been siphoned off" for defendants' personal use, the lawsuit states.
Weingarten and Weiss have withdrawn more than $42 million from accounts since 2007, written at least $350,000 in checks to "cash," and spent hundreds of thousands of dollars directly from charity accounts to pay Weingarten's home mortgages, car loans, utilities and the costs of remodeling the Weingarten's second home, purchased in 2009, according to the complaint. They also made "large and irregular payments to themselves," including $120,000 paid to Weiss and Weingarten on a single day, according to the state.
"Defendants appear to make only minuscule transfers of monies to Israel, where the charitable work they claim to support supposedly takes place," the attorney general claims.
"The actual activities defendants carry out in Israel are a mere shell compared to the impression conveyed by defendants' solicitations, which represent to prospective donors that the entity defendants operate robust networks of professionals who provide an array of services to needy Israelis," according to the complaint. "In reality, only two of the 19 entity defendants - Yad L'Shabbat and Hatzalah Shomron - are even registered in the State of Israel, and neither of these organizations are in good standing because they have failed to file required annual reports with the Israeli government."
Most of the entities "conduct no activity at all in Israel, and exist, if at all, only on paper as a vehicle through which Weingarten's fund-raising operation solicits charitable contributions from a generous public," according to the attorney general.
The defendants' banking practices are "so convoluted and complex that even Weingarten and Weiss are unable to keep the entities' funds straight. Since 2007, the defendants have bounced at least 2,100 checks, saddling the charities with a staggering amount of overdraft fees - over $65,000 - constituting an inexcusable waste," according to the complaint.
The attorney general's charities bureau subpoenaed Weingarten in May, asking him to explain the "highly suspicious and irregular activity."
Weingarten invoked his Fifth Amendment right against self-incrimination more than 600 times, "and refused to answer a single question about his fund raising operation," the lawsuit states.
The state's charities office served Weingarten with an administrative subpoena this month, seeking documents on the charities. Weingarten filed a motion to quash the subpoena two weeks later, arguing that "the act of production called for in the subpoena would violate his rights" against self-incrimination "because producing such documents would constitute a compelled testimonial act," according to the complaint.
The state wants the defendants barred from soliciting money or conducting any other business or charitable activity in New York. It also wants Weingarten, Yifat and Weiss removed as directors, disgorgement and restitution.
Also named as defendants are the alleged charities Hatzalah Rescue of Israel Inc.; Shearim Inc., aka Shearin; Bnei Torah Inc.; Chesed L'Yisrael V'Chasdei Yosef Inc.; Yad L'Shabbat Inc.; Hazalah Shomron Inc.; Pulse Foundation Inc. aka Pulse; The Israel Leukemia and Cancer Society; Agudath Chesed Bikur Cholim Israel Inc.; Kupat Reb Meir Baal Haness Bnei Torah Eretz Yisrael Inc.; Congregation Yad L'Shabbat Inc.; Shearim Hayad L'Torah Center for Hatzalah L'Shabbat and Chesed L'Yisrael Inc.; Israel Emergency Center; Magen Israel; Hayad victim Assistance Fund; Lmaan Hatorah; Our Children; Zaka Israel, aka Zaka; Yaldei Simcha Yisrael; and Yad Yisrael.
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