Bogus companies, fake congregations, tax schemes — Goldstein’s years of fraud revealed
21 Jul 2020

The Clarence S. Brooks Foundation is located in a nondescript three-story building on Wilshire Boulevard in Los Angeles that also has a Wells Fargo bank branch and an urgent care among its tenants.

From there, the small charitable foundation established in 2004 that had $5.8 million in assets at the end of 2018, makes grants primarily to Jewish educational organizations. The half-dozen or so annual awards run in the mid-to-low six figures each, records of the charity show.

So it probably was not much of a surprise when in 2013 the foundation received an application for a grant from Chabad of Poway, and its leader Rabbi Yisroel Goldstein. The grant application said the money would be used to run one of the several programs at the Poway synagogue, helping to pay for rent, remodeling costs and payroll.

The application was a winner. In early 2013 the foundation made a $600,000 grant to Goldstein, distributing the money in four $150,000 increments from February through November. It was one of the largest grants it made that year.

But the money didn’t go to the synagogue for remodeling, payroll or rent.

Instead, it went to Goldstein. He put some of the money in personal bank accounts and converted much of it to cash after churning the grant funds through several bank accounts he controlled. After the final payment arrived from the foundation, Goldstein handed over the bulk of the money, about $400,000, to another person who had cooked up the scheme with him, and pocketed the balance.

The Brooks Foundation scam is just one of numerous frauds described in detail in court documents related to Goldstein’s shocking plea on Tuesday to tax fraud and wire fraud. The 58-year-old rabbi — who gained international notoriety after a April 27, 2019 shooting attack on Chabad of Poway synagogue that killed congregant Lori Gilbert-Kaye and injured three others, including Goldstein — admitted to years of illegal schemes involving taxes, government programs, real estate and public and private grant programs.

The court records illustrate in relentless detail a spectrum of frauds that are staggering in their amount, scope and duration. They also reveal that after federal agents served a search warrant on Goldstein’s offices at Chabad of Poway and at his home in October 2018, the rabbi — now knowing he was under federal scrutiny— tipped off no fewer than five others who had participated in various schemes over the years.

One of them was an individual identified in the documents only as “M.S.” who had participated in the Brooks Foundation fraud with Goldstein and got the lion’s share of the misappropriated funds. In December 2018, five years after divvying up the foundation money and two months after the search, Goldstein warned M.S. about the investigation, the records say.

Goldstein pleaded guilty on Tuesday to conspiracy to defraud the government and wire fraud charges. The charges cover a period from 2010 to 2018 but prosecutors said he had been engaged in fraud as far back as the 1980s. The FBI put the total amount of money in play in the scheme at $18 million.

By Greg Moran, The San Diego Union Tribune, 19 July 2020

Read more at The San Diego Union Tribune

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