State Watch

San Diego rabbi sentenced to 14 months in prison for multimillion-dollar fraud scheme

A San Diego rabbi on Tuesday was sentenced to 14 months in prison for spearheading a multimillion-dollar fraud scheme that duped the IRS, public and private agencies, and several Fortune 500 companies in the city.

Rabbi Yisroel Goldstein, the former director of Chabad of Poway, must turn himself in to authorities by Feb. 23, the U.S. Attorney’s Office for the Southern District of California announced in a press release. He pled guilty to a tax fraud scheme based on fraudulent donations to his synagogue.

Goldstein was also ordered to pay $2.8 million in restitution by Cynthia Bashant, a federal district judge in San Diego who expressed disappointment in the former rabbi’s conduct.

“You dragged down so many congregants. Many of those individuals thought that they were committing these offenses to benefit the Chabad or the synagogue in general, when in fact it was to benefit you,” she told him, according to the U.S. attorney’s office. “It’s important to send a message to the community, and it’s important to send a message to you.”

Goldstein, 60, was injured in a hate crime attack at Chabad of Poway in 2019, becoming something of a hero for surviving the attack and recounting it to the media.

But Goldstein had been under investigation during that time, and later, the rabbi was charged for his multimillion-dollar fraud scheme. He pled guilty to his crimes in 2020.

Prosecutors say Goldstein received up to $6.2 million in charitable donations to the Chabad and “secretly refunded up to 90 percent of the donations” to donors — allowing them to claim fraudulent tax deductions with fake receipts — before pocketing 10 percent of it for himself. The IRS lost more than $1.5 million dollars in the scheme.

Goldstein also defrauded Fortune 500 companies out of $144,000 by secretly working with employees to match charitable donations. He then returned the donations and a fake receipt, allowing for more fraudulent tax deductions, and earned a share of profits himself.

His schemes extended beyond tax evasion and fraud; in another trick, Goldstein duped agencies out of $860,000 in fraudulent loans and grants, including from the Federal Emergency Management Agency, the California Governor’s Office of Emergency Services and multiple private foundations.

“Yisroel Goldstein exploited his position and stature as a faith leader to commit well-planned and carefully executed crimes of greed,” said U.S. Attorney Randy Grossman 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.”

Goldstein apologized in court during his sentencing hearing.

“I beg for mercy, to allow me to right the wrongs and be able to live out the rest of my life with remorse and if, given a chance, to do whatever I can to help others to the best of my ability,” he said, according to the Times of San Diego.

Tags California crime defrauding fraud fraud scheme Internal Revenue Service Rabbi San Diego tax fraud United States Attorney's Office Yisroel Goldstein

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