SAN DIEGO (CN) — Citing the need to “send a message” to Rabbi Yisroel Goldstein for orchestrating a multimillion-dollar tax fraud scheme involving members of the Chabad of Poway Synagogue, a federal judge on Tuesday rejected a plea agreement calling for home confinement and sentenced the rabbi to 14 months in federal prison.
“When I figure out what your sentence should be, it seems to me you dragged down so many congregants with you,” U.S. District Judge Cynthia Bashant told Goldstein.
She added: “They thought they were committing the offense to benefit Chabad when it was really just to benefit you and your own greed. I just don’t think home confinement adequately reflects what you did in this case.”
The Barack Obama nominee found Goldstein had obstructed justice by warning others involved in what prosecutors dubbed “The 90/10 Tax Scheme” of an FBI investigation while Goldstein was cooperating with authorities.
Bashant also ordered Goldstein to pay $2.8 million in restitution, including $1.8 million to the Internal Revenue Service.
“Yisroel Goldstein exploited his position and stature as a faith leader to commit well-planned and carefully-executed crimes of greed,” U.S. Attorney Randy Grossman said in a statement.
“As his serious criminal conduct was under investigation, the rabbi became a victim in a devastating attack on the synagogue he led. Today’s sentence accounts for these extraordinary circumstances and our office’s mission to always seek justice.”
As part of the scheme, Goldstein received 10% kickback payments from at least 18 donors and congregants who claimed to have made tax-free donations to the Chabad, only to be returned the funds minus Goldstein’s commission.
San Diego real estate agent and businessman Alexander Avergoon, who acted as a conduit to return fraudulent “donations” to purported donors, was sentenced to 64 months in prison Monday for his role in the scheme.
Goldstein also defrauded several San Diego-based Fortune 500 companies through corporate-matching wire fraud. Qualcomm, Johnson & Johnson and Northrop Grumman lost more than $144,000 in the scheme.
The rabbi and at least five accomplices would solicit donors to contribute to a purportedly non-sectarian organization controlled by Goldstein, only for the donation to be returned, usually in cash payments, according to a sentencing memo signed by Assistant U.S. Attorney Michelle Wasserman.
The donor would submit the purported donation to their employer, inducing the company to “match” the donation.
Goldstein’s attorney Benjamin Coleman argued the government was not actually obstructed by Goldstein’s fraud as individuals involved in the scheme pleaded guilty and Goldstein cooperated with authorities shortly after the raid.
“While it may seem unfair to some, defendants receive as much or more leniency in exchange for cooperation,” Coleman argued in calling for the plea agreement “approved by the highest levels of the U.S. Attorney’s Office” to be implemented by Bashant’s sentencing order.
The U.S. Attorney’s Office had suggested Goldstein be sentenced to eight months’ home detention as a condition of four years’ probation, a significant departure from the up to five years in prison Goldstein could have served according to federal sentencing guidelines for the conspiracy and wire fraud charges he faced.
Prosecutors recommended home confinement “to account for the extraordinary circumstances of the Chabad of Poway shooting and its aftermath.”
“Following the shooting, Rabbi Goldstein repeatedly spoke out about the attack, and was the face of the community both locally and nationally, despite his injury and PTSD,” according to Wasserman’s sentencing memo.
Goldstein apologized in court Tuesday.
“Your honor, I stand here today, my head bowed in shame. I have repented to God and begged forgiveness of this court and mankind for all the crimes, hurt and damages I have caused myself and others to commit,” Goldstein said.
He also submitted a two-page apology letter to the court. Several letters of support by congregants, family members and Jewish leaders were also submitted on Goldstein’s behalf.
Goldstein’s sentencing comes on the heels of the dual life sentences handed down to the teenaged shooter who terrorized his synagogue.
On Dec. 28, a federal judge sentenced John Earnest to life in prison in the federal hate crimes case brought against him for the 2019 shooting where congregant Lori Gilbert-Kaye was killed and Goldstein was among several people injured.
The second life sentence, while “merely symbolic" as acknowledged by the judge presiding over Earnest’s federal case, will be served concurrently with the life sentence Earnest was already serving in the case brought by the San Diego District Attorney’s Office.
Earnest avoided the death penalty after pleading guilty in the state’s prosecution. The U.S. Attorney’s Office declined to seek the death penalty in their case against Earnest.
During his comments in court Tuesday, Goldstein said Gilbert-Kaye “was like a sister to me, she was part of our family.”
“For 26 years, my wife and I hosted the Kaye family. When Lori gave birth to Hannah, I was there at her bedside. Fate had it I was the last to see Lori smile. I’m so sorry for your loss, I will never recover or forget those horrible moments,” Goldstein said.
Goldstein’s attorney requested he serve his sentence at the prison in Otisville, New York, which is known for accommodating observant Jewish detainees.
Bashant ordered Goldstein to self-surrender to federal custody by noon on Feb. 23.
Follow @@BiancaDBruno
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
DOJ announces new crime gun intelligence center in Chicago April 17, 2024 -
