The head of the Hasidic Spinka sect was arrested in Los Angeles for tax fraud and money laundering.
Rabbi Naftali Tzvi Weisz and his assistant Moshe Zigelman, both of Brooklyn, were arrested Wednesday on charges that they arranged and profited from accepting inflated charitable donations that saved the donors millions of dollars in federal income taxes.
Over the last 10 years, $8.7 million was solicited by Zigelman, of which the Hasidic Spinka sect kept nearly $750,000. The rest was refunded to donors who then claimed the bogus donations on their income tax returns.
The money was transferred through many sources, including the Los Angeles jewelry district and locations in Israel.
Six other men were charged in the scheme; four were arrested Wednesday. Two others are believed to be in Israel. Five Spinka charitable organizations, all in Brooklyn, were also named in the case.
The Spinka sect originated in Romania and its adherents are centered in Israel, Europe and Brooklyn.