LOS ANGELES (JTA) — The head of a Brooklyn-based Chasidic sect was sentenced to two years in federal prison for a decade-long fraud and money-laundering scheme.
Rabbi Naftali Tzvi Weisz, grand rebbe of the Spinka sect, was sentenced Monday in U.S. District Court in Los Angeles.
Weisz, 61, had pleaded guilty to one count of conspiracy last August.
The rabbi and six associates in Los Angeles, Brooklyn and Israel admitted to participating in a fraudulent kickback scheme in which donors to Spinka charities were refunded up to 95 percent of their donations while claiming the full amounts as deductions on their income tax.
In 2006, Spinka charities received nearly $8.5 million in donations and made $744,596 in “profits” after deducting amounts paid back to contributors.
Moshe Zigelman, the rebbe’s assistant, pleaded guilty last year and also received a two-year prison term.
Spinka is a fervently Orthodox sect that originated in 19th century Romania and has adherents in Israel, Europe and Brooklyn.
Weisz was facing up to five years in prison, but Judge John Walter said he decided on the shorter sentence after concluding that the rabbi did not participate in the scheme to enrich himself personally.
“I am embarrassed beyond words," Weisz told the judge. "My remorse is deep and heartfelt.”
A donor to Spinka charities who pleaded guilty to using the illegal tax write-off was sentenced to six months in prison earlier this year. Prosecutors are investigating more than 100 other contributors and warned that if they did not come forward voluntarily, they might face “significantly higher” sentences.
In a speech last summer in the Brooklyn Chasidic enclave Borough Park, Weisz told an audience of thousands that “We have learned the hard way,” and he urged everyone to follow the law, yeshivaworld.com reported.