SAN DIEGO — The founding rabbi of a California synagogue who rose to national prominence after he was wounded in an antisemitic shooting, and was then exposed as the perpetrator of a multimillion-dollar fraud, was sentenced Tuesday to 14 months in prison.
Both prosecutors and defense attorneys had recommended home confinement for Yisroel Goldstein, citing his leadership in the weeks following the 2019 attack on Chabad of Poway, the immense physical and emotional trauma the former rabbi continues to battle, and his cooperation in the FBI's fraud investigation.
But the judge rejected that punishment as not appropriate given the seriousness of the crimes.
"You not only committed this offense yourself but you took a lot of people with you," U.S. District Court Judge Cynthia Bashant told Goldstein, 60.
"It's important to send a message to the community and important to send a message to you," she added.
Goldstein must also pay about $2.8 million in restitution, an amount shared with several other defendants who were prosecuted as participants in the financial cons.
He must self-surrender by Feb. 23, although he could appeal for a later date if COVID-19 continues to surge. The judge agreed to recommend he be housed at a medium-security federal prison in Otisville, New York, which his defense attorney said is known to accommodate observant Jews.
As a rabbi in the Chabad movement — which practices Orthodox Judaism but is also known for its welcoming nature — Goldstein counted on the generosity of his congregation for his salary. He found other ways to supplement his income.
The FBI says Goldstein had his hand in a number of fraudulent schemes exploiting tax loopholes, corporate benevolence and government grant assistance.
Prosecutors said he personally earned at least $620,000 from the conspiracies.
The most prevalent of the schemes is known as the "90/10" fraud. Donors regularly made large charitable contributions to Chabad of Poway or one of its affiliated nonprofits, to be written off their taxes. But instead of the money going to the organizations, Goldstein secretly funneled 90 percent of it back to the donor, keeping 10 percent for himself. One donor got his donation returned in the form of $1 million in gold, prosecutors said.
At least a dozen people took Goldstein up on the tax-evasion scheme, resulting in at least $1.5 million in tax losses to the IRS, according to prosecutors.
In one variation on the scheme, donors would solicit their companies for matching charitable contributions. Goldstein would then return all of the original amount to the donor while keeping the corporation's matching funds. The corporations were given fraudulent donation receipts, and many took the tax deductions.
At least three Fortune 500 companies, including Qualcomm, were defrauded out of nearly $145,000 total.
In a letter to the judge and further statements in court, Goldstein expressed deep remorse.
"I beg for mercy to accept my repentance and allow me to right the wrongs and be able to live out the rest of my life with remorse and to be given the chance to do whatever I can to help others to the best of my ability," he told the judge Tuesday.
Goldstein, who first launched the synagogue in Rancho Bernardo in the 1980s, was long known as a leader in the local Jewish community. But he became an international figure, delivering a powerful message against hate, when he and three members of his congregation were shot in an anti-Semitic attack on April 27, 2019. One, Lori Gilbert-Kaye, whom he described in court as like a sister, was killed.
The gunman, John T. Earnest, 22, was recently sentenced to two life terms in prison on both state and federal charges.
Bullets struck the rabbi in both hands, causing him to lose a finger and leaving another severely injured.
Still, in the hours and days after the attack he delivered words of hope — from an impromptu speech while standing on a chair right after the shooting to appearances at the White House and United Nations.
No one knew at the time that he was the subject of a fraud investigation that had been open for more than a year.
Goldstein stepped down as rabbi in November 2019, citing exhaustion. News of his crimes wasn't made public until the following summer, when he pleaded guilty to tax and wire fraud.
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