Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Tuesday, December 22, 2009

A Spanking for Spinka, Part 2

This Blog's posting of 15 July 2009 discussed some broader implications of the plea agreement entered into by Naftali Tzvi Weisz, the Grand Rabbi of Spinka, in connection with his criminal money laundering charges. The subsequent posting of 31 July 2009 mentioned some of the contritionary acts and statements made by the Rabbi as he awaited sentencing.

Yesterday, in Los Angeles, U.S. District Judge John F. Walter imposed the sentence. The following matters are noted:

1. The statutory maximum for the offense is 5 years incarceration, plus 3 years supervised release, plus monetary fines. The plea agreement provided that the Rabbi would face no more than 3 years. The sentence actually imposed by Judge Walter was 2 years.

2. Yeshiva Imrei Yosef, one of the Spinka charitable institutions involved in the scheme, also pleaded guilty, and is slated to be sentenced in January 2010. It is not practical to incarcerate a corporation, but it can be fined, and such fines can result in the discontinuance of its existence. It is noted that the Spinka institutions, with the approval and encouragement of some major Rabbis connected with the Agudath Israel of America, are currently engaged in a campaign to collect money (and have an Internet presence for doing so, notwithstanding the many broad brush condemnations of the Internet by those same rabbis). I have received their solicitations, which tug at the heart strings and ask me to think of the innocent children whose education is now jeopardized. I agree with Rabbi Harry Maryles that if the good works done by the Spinka institutions are worthy of support, then the institutions should sever their connections with the Spinka hierarchy.

3. Leslie P. DeMarco, the ranking FBI Special Agent in Los Angeles, insinuated a quote into the US Attorney's press release: "Grand Rabbi Naftali Weisz exploited his position in the community, knowingly using the Spinka charitable organizations for the benefit of greedy donors. Today's sentencings close this aspect of the investigation. The donors, who were refunded up to 95 percent of the contributions they made to the Spinka charities but falsely claimed a charitable contribution deduction for the entire donation, are put on notice that they, too, have committed a crime, and that crime is tax fraud."

My take on it all:

Special Agent DeMarco's statement is an unambiguously clear signal that additional repercussions are in the pipeline. There is no doubt that scrutiny of the list of Spinka contributors has already begun. Rumors already are circulating, to the effect that one or more of the Spinka contributors have already cut deals with the IRS in order to avoid prosecution (or at least lessen the severity of criminal liability). I do not doubt that those who participated in the Spinka tax scam who have not come forward can expect some unpleasant visitors in the near future.

As for the Rabbi's sentence: The Rabbi got two years when he could have been slapped with three. That the Rabbi has been contrite is no secret. It is almost a given that he has encouraged his donors to make amends, and this has probably played a role in his sentence reduction.

The real question is whether the Rabbi has done more than that in return for the lenity he received. Has he, for example, provided or facilitated the provision of valuable information regarding transactions of others beyond the pale of the Spinka institutions?

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