Wednesday, May 20, 2015
Union City man sentenced to 2 years in prison for bogus charity
A Union City man was sentenced to 27 months in prison on Tuesday for using a fake charity tied to a massive corruption sting to hide millions of dollars from federal and state regulation.
Moshe "David" Schwartz, 34, headed the Gemach Shefa Chaim, a bogus charity caught up in the largest federal money laundering and corruption sting in state history. Schwartz used the organization as an unchartered bank to deposit millions of dollars from more than 350 clients, as well as nearly $1 million of his own money, U.S. Attorney Paul J. Fishman said in a release.
The charity purported to provide interest-free loans to needy members of the Sanz Hasidic community in Union City.
Schwartz pleaded guilty in April 2014 to operating an unchartered bank, which allowed clients to evade federal taxes and launder money. He also admitted to lying about his income, reporting that he only made $24,475 in 2007 when he actually made $208, 845, Fishman said.
Authorities seized the charity's bank accounts, along with $500,000, in July 2009. The accounts had been used by three others—Moshe Altman, Itzak Friedlander and Shimon Haber— to launder funds on the behalf of Solomon Dwek, the government informant at the center of the Operation Bid Rig III corruption sting, prosecutors said. More than 40 public officials and other were arrested in the sting, which all connected back to Dwek, who posed as a corrupt developer who offered to pay off politicians in order to get projects speedily approved.
Haber, Friedlander and Altman have already pleaded guilty to various charges, including conspiracy to launder monetary instruments, and have been sentenced, respectively, to five-month, 24-month and 41-month prison terms, Fishman said.
In addition to his prison sentence, Schwartz has to serve two year of supervised release and must pay $74,889 in restitution for what the IRS lost from his 2007 taxes and a $60,000 fee.
http://www.nj.com/hudson/index.ssf/2015/05/union_city_man_sentenced_to_2_years_in_prison_for.html
Moshe "David" Schwartz, 34, headed the Gemach Shefa Chaim, a bogus charity caught up in the largest federal money laundering and corruption sting in state history. Schwartz used the organization as an unchartered bank to deposit millions of dollars from more than 350 clients, as well as nearly $1 million of his own money, U.S. Attorney Paul J. Fishman said in a release.
The charity purported to provide interest-free loans to needy members of the Sanz Hasidic community in Union City.
Schwartz pleaded guilty in April 2014 to operating an unchartered bank, which allowed clients to evade federal taxes and launder money. He also admitted to lying about his income, reporting that he only made $24,475 in 2007 when he actually made $208, 845, Fishman said.
Authorities seized the charity's bank accounts, along with $500,000, in July 2009. The accounts had been used by three others—Moshe Altman, Itzak Friedlander and Shimon Haber— to launder funds on the behalf of Solomon Dwek, the government informant at the center of the Operation Bid Rig III corruption sting, prosecutors said. More than 40 public officials and other were arrested in the sting, which all connected back to Dwek, who posed as a corrupt developer who offered to pay off politicians in order to get projects speedily approved.
Haber, Friedlander and Altman have already pleaded guilty to various charges, including conspiracy to launder monetary instruments, and have been sentenced, respectively, to five-month, 24-month and 41-month prison terms, Fishman said.
In addition to his prison sentence, Schwartz has to serve two year of supervised release and must pay $74,889 in restitution for what the IRS lost from his 2007 taxes and a $60,000 fee.
http://www.nj.com/hudson/index.ssf/2015/05/union_city_man_sentenced_to_2_years_in_prison_for.html
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