They talked in code. Cash was "gemoras." Money-laundering contacts were "washing machines." They met in cars, on a Brooklyn street corner, inside a bakery, and in a synagogue.
Tens of thousands of dollars in cash was transported in plastic bags, in boxes of Apple Jacks and Cinnabon Crunch cereal, and even a box decorated with Power Rangers stickers.
The men the FBI arrested July 23 and charged with being part of a massive international money-laundering scheme were, for all intent and purpose, "crime bosses," acting U.S. Attorney Ralph J. Marra Jr. said.
But at least several of them were, in fact, religious leaders in the tight-knit Syrian Jewish communities of Deal and Brooklyn, N.Y. They stand accused of using Jewish charities they controlled to launder millions of dollars in cash.
Court papers indicate that five rabbis and several other men were laundering money for an FBI cooperating witness who told them he needed to hide profits of his counterfeit handbag company, which produced knock-off versions of Prada, Gucci and Canali bags, which the witness said were sold for hundreds of dollars.
Sources have identified the witness as Solomon Dwek, 36, of Ocean Township, a disgraced real estate mogul who was arrested in May 2006 and charged with bank fraud. Dwek is accused of cashing a bad check for $25.2 million at a drive-in lane at PNC Bank branch in Eatontown. The bank spotted him the money, most of which he moved to other accounts. The bank was left with a $21 million loss when the check bounced, according to the FBI.
Brad Simon, a former federal prosecutor and assistant U.S. Attorney for the Eastern District of New York, said he is surprised the government's case appears to rely so heavily on the testimony of one key witness with a checkered past.
"This guy, at least from a defense attorney's point of view, seems like a treasure trove for defense purposes," said Simon, who is now a criminal defense attorney who represents clients accused of white collar crimes. "I would love to have the opportunity to cross-examine this guy."
Speaking to Brooklyn Rabbis Lavel Schwartz and Mordchai Fish in his car parked on a borough street in September 2008, the FBI's witness told them that a $50,000 check he was giving them to launder was "from the profits from the bags and the PNC," according to criminal complaints.
Fish, 56, and Schwartz, 57, both have been charged with money laundering.
The witness first infiltrated the money-laundering network, and then, in July 2007, began representing himself as a developer and the owner of a tile business to public officials in Hudson County, according to U.S. Attorney Marra.
The witness was eventually introduced to a web of public officials, council and mayoral candidates, and their associates, who took bribes in return for pledging their assistance in getting the witness's projects approved, or in steering contracts to him, Marra said.
When speaking to the targets of the money-laundering operation, Dwek openly discussed his bankruptcy problems, as well as the fact that he was involved in illegal businesses and bank frauds, according to sources and court records.
Dwek told the targets that his ongoing bankruptcy proceedings meant he had to conceal cash and assets, and that some of the money he needed to launder came from his "bank schnookie deals," a reference to bank fraud.
Prosecutors said they have hundreds of hours of video and audio recordings documenting much of the money laundering and bribes.
Marra called the money-laundering case "unprecedented" in the "number and prominence of the individuals involved."
The rabbis and their associates continued working with the witness even though they sometimes expressed concern about the possibility of getting caught.
In March, the witness was driving Fish to a Brooklyn meeting with Levi Deutsch, an Israeli who supplied cash for Fish's money-laundering operations. When the witness mentioned cross streets to which they were headed, Fish became nervous, according to court records.
"Don't even say the street. . . . in this car," Fish said, according to the complaints. The witness reassured Fish that "there's nothing. I had (the car) swept. Don't worry about it," to which Fish replied, "swept, shmept."
Latest corruption probeThe arrests marked the third phase of the "Operation Bid Rig," investigation by the FBI, the IRS Criminal Investigation Division and the U.S. Attorney's Office that began in Monmouth and Ocean counties 10 years ago.
The initial investigation became public in 2002 with the guilty plea of Ocean Township Mayor Terrence Weldon, who admitted extorting cash from several developers to influence approval of projects.
Forty-eight public officials have been convicted since the Operation Bid Rig investigation started in 1999.
On Thursday, another 44 people, including three mayors, two assemblymen, a Lakewood housing inspector and five rabbis were charged as part of a two-pronged investigation into political corruption and money laundering. Local Assemblyman Daniel M. Van Pelt, R-Ocean, was arrested on a charge of accepting $10,000 in a bribe.
Israeli cash
To start the money laundering, Dwek handed over checks — often made out to charities run by the religious leaders — and said they were proceeds of his illegal activities, sources and court papers indicate.
Three of the rabbis had connections to cash sources in Israel, and for a fee, those men in Israel made money available through "cash houses" run out of Brooklyn homes, offices and a bakery, according to court documents.
The men who ran those cash houses obtained the money at the direction of the co-conspirators in Israel, then gave the funds to the rabbis in Deal and Brooklyn, according to court papers.
The religious leaders took their cut, generally 10 percent, then turned over the remainder to the FBI witness, according to court papers.
During one meeting in Brooklyn, Eliahu Ben Haim, 58, of Long Branch, the principal rabbi of Congregation Ohel Yaacob in Deal who is accused of laundering $1.5 million, spoke with the witness about his cash source in Israel.
Ben Haim said he talked to the man every day or every other day, and said in the past four years, the Israeli man had the rabbi send out wires, under different names, all over the world, from Australia to New Zealand to Uganda, according to the FBI's complaint.
"It's unbelievable. I never saw anything like it," Ben Haim said, according to court documents. "I mean every country imaginable. Turkey, you can't believe it. . . . All different names. It's never the same name. . . . Switzerland, everywhere, France, everywhere, Spain . . . China, Japan."
In another method, the witness would bring a check to two other rabbis, Saul Kassin, 87, and Edmond Nahum, 56, principal rabbi at the Synagogue of Deal, according to prosecutors. Kassin is the spiritual leader of 75,000 Syrian Jews in Brooklyn.
Prosecutors said the rabbis would write the witness checks from a charity bank account for a slightly smaller amount, payable to the entity of his choice.
The witness then cashed the Kassin checks through Ben Haim, authorities said.
Criminal complaints say Kassin laundered more than $200,000 and Nahum laundered about $185,000.
Lawyers for the two men said they are innocent.
Nahum's attorney, Justin P. Walder, said the rabbi looks forward to clearing his name at trial. The rabbi has headed the Deal synagogue for many years, is well-established in the community and is married with four children, he said.
Walder did not mention Dwek by name, but said his client had been taken advantage of by a man who had known the rabbi for a long time.
"We intend to establish that his goodness was utilized by a person who was seeking to be absolved for his immense wrongful conduct by implicating another," Walder said. "Obviously, this man, under the system that exists in the federal court, the way he can get the best deal for himself is to implicate another, and obviously he took advantage of the rabbi."
Source:
APP.COM
