Charity Scams

Tom Herman writes for the WSJ:

Here are a few areas IRS and Justice Department officials have been focusing on and advice from lawyers and accountants on how to avoid trouble:

 Kickbacks. Consider the case of the two men who pleaded guilty recently to criminal misconduct involving donations to a variety of charitable groups operating under the umbrella of Spinka, a religious group within orthodox Judaism. One was Joseph Roth, a Tel Aviv-based banker, according to the U.S. Attorney’s office for the central district of California. The other was Rabbi Moshe E. Zigelman of Brooklyn, N.Y., who "pled guilty because he accepts full responsibility for his actions and seeks to atone for any harm he caused," says Michael J. Proctor, a lawyer at Caldwell Leslie & Proctor in Los Angeles.
 

They were among eight individuals and five charitable entities indicted in the Spinka case late last year. The government accused Rabbi Naftali Tzi Weisz and Rabbi Zigelman, formerly an assistant to Rabbi Weisz, of soliciting donations to Spinka-related groups by promising to secretly refund up to 95% of the "contributions." Rabbi Weisz pleaded not guilty, says Brian Hennigan, a lawyer with Irell & Manella in Los Angeles.

In some cases, contributors got cash payments through an "underground money transfer network" involving various parties, some of whom operated businesses in and around the Los Angeles jewelry district, the U.S. Attorney’s office said. Among other things, Mr. Roth admitted to facilitating tax evasion by setting up secret bank accounts in Israel involving the use of bogus trusts, according to a U.S. Attorney’s office statement.

About Luke Ford

I've written five books (see Amazon.com). My work has been followed by the New York Times, the Los Angeles Times, and 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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