Ex-Chabad of Poway Rabbi Sentenced to 14 Months of Custody in Fraud Case

SAN DIEGO (CNS) - Former Chabad of Poway Rabbi Yisroel Goldstein was sentenced today to 14 months in custody for engaging in a series of fraudulent schemes, most notably a tax fraud in which supposed charitable donations made to the synagogue were funneled back to donors.

Goldstein was also ordered to pay nearly $3 million in restitution to victims, which include the IRS and companies that matched donations their employees made to the Chabad.

"I stand here today, my head bowed in shame, remorse and disappointment over the crimes that I have committed to God and mankind," Goldstein said while addressing the court Tuesday.

In what prosecutors have termed the ``90/10'' scheme, Goldstein accepted charitable donations, then would send about 90% of the funds back to the donors, while pocketing the remainder for himself. Donors would then falsely claim on tax forms that 100% of their donations went to the Chabad, with Goldstein providing the false donors with fake receipts.

In addition to the money Goldstein returned to them, co-defendants whose employers took part in corporate donation matching programs also pocketed the matching donation amounts provided by the companies.

In a separate scheme, Goldstein also fraudulently obtained nearly $1 million in grant funding with the help of forged documents provided by ex-real estate agent Alexander Avergoon, who was sentenced Monday to more than five years in prison for defrauding investors.

Goldstein pleaded guilty in 2020 to federal fraud charges and was subsequently removed from the Chabad.

The rabbi gained notoriety after he was wounded in the deadly 2019 shooting at the Chabad of Poway, and became a public figure who spoke out against anti-Semitism.

Despite a joint recommendation of home detention from prosecutors and Goldstein's attorneys, U.S. District Judge Cynthia Bashant said custody was warranted. The judge said many of Goldstein's co-defendants thought their offenses would ultimately benefit the Chabad, but said, "Really, it was just to benefit you. It was for your personal benefit and your own greed and I can't ignore that fact."

Bashant added, "I just don't think that a home confinement adequately reflects what you did in this case. I think it's important to send a message to the community and to send a message to you."

Goldstein was ordered to surrender to authorities by Feb. 23 to begin his sentence. His attorneys requested that Bashant recommend he serve his sentence at FCI Otisville, a facility in New York state which Goldstein's attorneys said was more accommodating for practicing Jews.

When charges were announced against Goldstein, prosecutors credited him for his leadership in the wake of the 2019 shooting and said they would recommend probation in light of his cooperation with authorities, which led to several co-defendants' guilty pleas.