Up to 5 years in prison
צילום: ויז'ואל/פוטוס
Israeli banker pleads guilty to cheating IRS out of $33 million
66-year old former United Mizrahi banker from Tel Aviv admits to being part of LA ring helping people to avoid paying taxes by having them make contributions to Jewish charities
An Israeli banker pleaded guilty Friday to participating in a decade-long tax fraud and money laundering scheme that cheated the Internal Revenue Service out of at least $33 million.
Joseph Roth, 66, of Tel Aviv, a former banker with United Mizrahi Bank, pleaded guilty to conspiracy to commit tax fraud, US Attorney's spokesman Thom Mrozek said. He faces up to five years in prison and a $250,000 fine when he is sentenced October 20.
Roth is among eight people and five charities indicted by a grand jury last year. Prosecutors said the defendants helped people avoid paying federal income taxes by having them make contributions to charitable groups run by Spinka, a New York based Orthodox Jewish group.
The lead defendants in the case – Rabbi Moshe E. Zigelman and Grand Rabbi Naftali Tzi Weisz of Brooklyn, New York – were accused of soliciting millions of dollars in contributions by promising to secretly refund up to 95 percent of the donations. That way, the contributors could falsely claim higher tax deductions, authorities said.
Prosecutors say that in some cases donors received cash payments through an underground money transfer network involving business owners in Los Angeles' jewelry district.
Zigelman is also expected to plead guilty to the same charge at a hearing on Tuesday, Mrozek said, citing a plea agreement in which the rabbi admitted to taking part in the scheme. Weisz, who plead not guilty in December, and the remaining defendants are scheduled to go on trial September ninth.
