Brothers Who Made 'Contributions' To Orthodox Jewish Organizations Plead Guilty To Tax Evasion After Taking Secret Refunds From Groups
LOS ANGELES – Two brothers who made tens of thousands of dollars of contributions to charitable organizations operating under the umbrella of a New York-based orthodox Jewish group known as Spinka pleaded guilty today to tax fraud for taking tax deductions for contributions that were refunded by the non-profits.
Alan Goldstein, 78, and David Goldstein, 74, both of the Hancock Park district of Los Angeles, pleaded guilty before United States District Court Judge John F. Walter. Alan Goldstein pleaded guilty to one count of subscribing to a false income tax return and one count of tax evasion. David Goldstein pleaded guilty to two counts of tax evasion.
According to court documents, the Goldsteins each entered into an arrangement under which they would make contributions to Spinka charitable organizations -- including Yeshiva Imrei Yosef, Mosdos Hachesded, Central Rabbinical Seminary, and Kollel Ner A’Avrohom – and in return agents of Spinka would secretly refund 90 percent of the contributions through various third parties. In addition, agents of Spinka would mail charitable contribution receipts for the full amounts of the contributions.
According to plea agreements filed in federal court, in 2005 and 2006, Alan Goldstein made $135,000 in contributions to charitable organizations operating under the Spinka umbrella. Alan Goldstein accepted kickbacks equaling 90 percent of his contributions on these Spinka-related contributions. Similarly, for the same two years, David Goldstein made $145,000 in contributions to Spinka-related entities, and he received 90 percent of the money back through kickbacks. David Goldstein received $356,400 in kickbacks on behalf of himself and his brothers.
Both defendants filed their respective 2005 and 2006 tax returns claiming the inflated contribution amount for the purpose of tax fraud. Consequently, the tax loss to the government was $45,961 with respect to Alan Goldstein, and $46,531 with respect to David Goldstein, according to the plea agreements.
Spinka is a religious group within Orthodox Judaism that operated a variety of charitable organizations, contributions to which could be tax deductible under the Internal Revenue Code. Prior to the Goldsteins, 16 other defendants pleaded guilty to charges arising from an investigation of kickbacks provided by Spinka charitable organizations to wealthy contributors.
The Goldsteins are scheduled to be sentenced by Judge Walter on August 19, 2013. At sentencing, Alan Goldstein faces a statutory maximum sentence of eight years in federal prison and a fine of $500,000. David Goldstein faces a statutory maximum sentence of 10 years in prison and a fine of $500,000. In addition, each defendant may be ordered to pay full restitution for the tax loss, which is estimated to be $55,145 for Alan Goldstein and $70,039 for David Goldstein.
The investigation and prosecution of the Goldsteins was conducted by IRS Criminal Investigation’s Los Angeles Field Office.
Release No. 13-076