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Friday, December 21, 2007

Fraud and Corruption from the Top to the Bottom

Sadly, a reader made me aware of a news story regarding the arrest of (a) Grand Rebbe of Spinka, his Gabbai, and a host of other people involved in a massive tax fraud scheme stretching from Brooklyn to Los Angeles, with money also being funneled through a bank in Israel. In 1994 or 1996 (?) a similar story of a tax fraud and money laundering scheme broke and arrests were made in both New York and Los Angeles. The pink tint on my glasses was chipped at that point. When Clinton left office in 2000 and pardoned the New Square men who managed to make off with $40 million dollars (this is a huge number for those that know fraud!) as well as a minority woman that got her hands on $8 million, the pink tint that was left was pretty much stripped off. [Facts disputed and oted that the men did spend time behind bars].

Over 10 years later, I wish I just want a little bit of pink tint back. While apologists on sites like VosIzNeis want to hang the "mosser," and ask everyone to be "dan l'chaf zechut," and pretend the government has just made a terrible mistake in these arrests, my professional background makes me 99.9% certain that the men arrested won't be walking free. (See the comments from the wife of a fraud specialist. I could have written the same thing, except my husband does not work in investigations. Rather, I've actually traced and detected fraud in what seems like a previous lifetime. . . . baruch Hashem, I've never, ever dealt with anyone Jewish).

Setting up a tax fraud scheme where hundreds of individuals "donated" millions of dollars and then itemized those donations when they knowingly received an 80-95% rebate is planned, deliberate, intentional, malicious, and illegal criminal activity. This isn't giving in to a small temptation such as deducting the price of your tickets to a Chinese Auction. This took massive manpower. Such a scheme perpetuated from the top and joined in by a hundreds of people speaks volumes about the lack of integrity, the worship of the dollar, and the precarious financial situation of the Orthodox Community as a whole, as the Chassidish community in particular.

Some people would like you to believe that massive defrauding of the government and the taxpayers of millions of dollars is a victimless crime. But, surely there are many victims besides the taxpayers as a whole (and given the amout of tax we pay year in year out, stories of fraud make me feel like I have been personally pickpocketed).

Certainly the wives (assuming they didn't participate in the scheme themselves) are victims. They now will bear the brunt of their husband's misdeeds, especially if there are children still in the home. The emotional and financial damage must be enormous. Since I have started this blog, I have planned to write a post on wives getting involved in the finances. I think it is important for so many reasons. This is yet another powerful reason.

Another set of victims are the children and grandchildren. And not just their direct descendants who will be without a father/grandfather, but other children who are starting to see the seedier side of Orthodox life, which can invite a bit of cynicism to put it lightly.

The news story notes that one of the men arrested was a scribe/sofer. One would assume that every mezuzah he has written/repaired as well as every Torah he has written/repaired during the time he was involved with this or other schemes is now possul. But that is a question for a posek. And, I'm not that posek. If so, there is another group of people who will have been directly defrauded.

And, lastly, every Jew is a victim. I, for one, just want my pink glasses back. There is so much to say, but I really just feel like crying.


Zach Kessin said...

Not sure which made me want to cry more
1) The general attitude of blame the rat, which reminded me of nothing so much as the mob.
2) The total lack of complaint about the original crime
3) The really bad almost english

I'm leaning on #3 but its a toss up.

Tamiri said...

To SL: Off topic: you may be interested to check out the discussion at

I can't find an email address for you on the blog

Anonymous said...

These sects are a danger to Jews and Judaism in more ways than one.

It's about time we stopped giving them deference.

Why does the Jewish Press run a weekly column by a convicted swindler by name of Rabbi Gershon Tannenbaum dedicated to whitewashing and promoting them ? Disgraceful. Shame on them.

I wonder if they will report this story (not holding my breath).

Neandershort said...

The Stinka From Spinka

Bit of cynicism? My son is as cynical at 25 as I am at 55. I fear for his observance when he leaves home.

A Simple Jew said...

For a related posting, see here

Chaim B. said...

Well put post. Too many people react to these incidents with apologetics instead of contrition, which only perpetuates the problem.

Halfnutcase said...

it was stated in the shulchan aruch that "one who does not teach his child a trade, teaches him to steal"

and elsewhere in our mesorah "torah without a trade will in the end cease and lead to sin."

Me thinks we are witnessing the results of this.

Anonymous said...

I think observance is getting to be a mile long and an inch thick.

And no matter how religious I think I am and how much trust in Hashem I think I have, I lay awake at night worrying about HOW TO PAY MY GIGANTIC TUITION BILL and all the other trappings of living Jewish that are totally out of control and are standard fare. And I am not talking about lifestyle, I am talking basics: tuition, tzeddakah/shul, Kashrut, and of course Israel.

Am I that different from my brethren you mention here? At what point do we reach total saturation? Who am I to pass judgment on these people who probably have similar problems?

To me, this boils down to a fundamental break down of Jewish leadership; we cannot separate the significant from the insignificant in Kashrut, Tzeddakah and Observance. And our rebbeim have FAILED to help us. Their answer is always MORE MORE MORE, Baruch Hashem, he will provide. AL AVAY? How do they know that?

And we all suffer. We have lost the significance of observance and menchlekeit and belief. We cannot see the forest from the trees.

Ezzie said...

Great post SL. Great, great post.

confused by the hate said...

Question: How did you extrapolate from the acts of this group that it is a community-wide problem? When you read an article about an alleged corrupt priest, do you also come to the conclusion that all Christians have a "lack of integrity"?

SephardiLady said...

Tamiri-Thanks for the link. Maybe I will try to address the subject another time since it fits in with this blog. BTW, I'd love it if you could email me at Orthonomics at Gmail dot com.

Anonymous-I hear you.

Confused-I don't know what hate you are seeing. There have been enough cases of fraud in the past years with involvment from Chassidim, Litvish, Sephardim, more Modern, etc to see this problem belongs to all of us.

Abbi said...

Confused- when on of these stories breaks about every other month, and pple are outraged, there's always one smartmouth who complains "Why generalize?".

First of all, unless you've been hiding your head in the sand or living in a cave for about 100 years, these stories are written about ALL THE TIME. This is a chronic problem. I heard there's a white collar prison somewhere in upstate NY with much more then a minyan of guys hanging around there. In Queens and Flatbush, they refer to these criminals as "sitting": ie: "He's sitting for 6 years for tax fraud"

Sorry, when you have slang for this type of behavior, it's not a lone, isolated case that happens once in a blue moon.

And even if it was, say, such a case, there is still the small concept of chillul Hashem. Yes, these pple's dispicable behavior reflects on the entire community. So pple have every right to generalize.

Neandershort said...

I heard there's a white collar prison somewhere in upstate NY with much more then a minyan of guys hanging around there.


Tamiri said...

All a frum Jew has to do in order to shake off the tarnish of "sitting" is buy something nice for the shul and *poof* he/she is absolved by the community.
I've seen it with my own eyes...

DAG said...

I repeat my continual call that NO ONE give money to an organization that does not publish a public 990...PERIOD. I also highly recommend a CharityNavigator search before making any donations.

While it is not nearly at the same level of issur or chilul Hashem, I think the amount of Momen Hekdosh that is squandered due to pure incompetence is equally unacceptable.

Neandershort said...

And what about duplication, what with a gazillion charities all for the same purpose (bikur holim, disabled children, etc) dunning us for money because everybody has to be a "makher?" How much of our money winds up in the makhers' pockets?

anonymous mom said...

ANon 6:58, you said it better than i have ever seen it written about in print:

"I think observance is getting to be a mile long and an inch thick."

And to SL, this post was written so well, so well. You could have done this a million other ways or veered off, but you were right on.

Big sigh.

Mordechai Y. Scher said...

Well written post. I am just very sad that it needs to be written (again)(and again). I feel truly sullied and shamed when this stuff is done.

Hazak u'varuch!