The longtime leader of a Southern California synagogue who was wounded in a deadly attack at the house of worship he founded pleaded guilty Tuesday to participating in a multimillion-dollar fraud that disguised charitable contributions for personal gain.
Rabbi Yisroel Goldstein faces a maximum sentence of five years in prison for conspiracy to defraud the United States and commit wire fraud, but prosecutors said they will recommend probation as part of a plea agreement. They noted his cooperation with investigators after federal agents raided his home in October 2018 and his widely praised response to the attack on the Chabad of Poway synagogue in April 2019.
Robert Brewer, the U.S. attorney in San Diego, said it was “a very difficult day for all of us.”
“His role after the 2019 terrorist attack was exemplary,” Brewer said at a news conference. “He became a significant advocate for peace and elimination of violence based on religious hatred. He spoke all over the world and sent a strong message of peace.”
Goldstein, 58, lost his right index finger in the attack on the last day of Passover, which killed one congregant, Lori Gilbert-Kaye, and injured the rabbi and two others. The rabbi received an outpouring of support that included meeting President Donald Trump at the White House.
John T. Earnest, 20, has been charged in the attack in state and federal court. He has pleaded not guilty to hate crime-related murder, attempted murder and other charges.
Goldstein, who founded Chabad of Poway near San Diego in 1986, collected $6.2 million in fake donations to the synagogue and affiliates and returned 90% to contributors with phony receipts, allowing them to deduct the full amount from their taxes, prosecutors said. Goldstein kept the remaining 10%, or more than $600,000, for himself.
Goldstein acknowledged disguising a fake donation of more than $1.1 million in late 2017 by purchasing about $1 million in gold coins and giving them to the phony donor.
“We call this the 90-10 tax fraud scheme” Brewer said.
Goldstein acknowledged defrauding three unnamed Fortune 500 companies out of $134,000 for matching employee donations. The employees deducted the fake donations from their taxes, and Goldstein kept the corporate donations for himself.
Chabad-Lubavitch, an organization that traces its roots to the 1940s and counts more than 3,500 institutions, called the news “terribly shocking and troubling.” It said it relieved Goldstein of his duties at Chabad after learning of the allegations late last year.
“Our hearts go out to Rabbi Goldstein’s former congregants, to his family and to the broader Poway community, all of whom have already experienced more devastation than anyone should ever know,” Chabad-Lubavitch said in a statement. “We pray that their faith and resilience strengthens them in this difficult time as well.”
In November, citing exhaustion, Goldstein retired from the leadership of Chabad of Poway. One of his sons now leads the congregation.
At least 20 people were involved in the schemes and the investigation is ongoing, prosecutors said. Besides Goldstein, five others pleaded guilty in federal court this week, including Alexander Avergoon, whose real estate dealings sparked the investigation in 2016.
Avergoon, 44, was arrested in Latvia and extradited to face charges.
Prosecutors described Chabad of Poway as a victim because the synagogue never received donations that they believed they had. They said the scheme may date back to the 1980s.
Emily Allen, an assistant U.S. attorney, said Goldstein's message of tolerance and love in the shooting's aftermath helped heal the congregation and resonated around the world.
"He had another side in which he undeniably devoted much of his life toward serving others,” Allen said.
