Rabbis Arrested for Money Laundering in Massive NJ Corruption Case

A Federal corruption probe into influence-peddling and bribery by New Jersey mayors and other politicians led investigators to a money laundering scheme operated by rabbis in New Jersey and Brooklyn, New York, according to charges brought by the U.S. Department of Justice. Among the rabbis arrested yesterday in the money laundering probe: Rabbi Saul Kassen, chief rabbi of the Syrian Jewish Community in Brooklyn, Rabbi Eliahu Ben Haim, of Congregation Ohel Yaacob in Deal, and Rabbi Edmund Nahum of Deal, Rabbi Mordechai Fish of Brooklyn and Rabbi Lavel Schwartz.

Operation Bid Rig was the name of the FBI's decade long investigation focusing on influence-peddling and bribery in New Jersey government. According to a press release issued by the US Attorney's Office in New Jersey, law enforcement personnel with the assistance of a cooperating witness infiltrated a pre-existing international money laundering network operated by the arrested rabbis during this broader investigation. That cooperating witness has since been identified as Solomon Dwek, son of Rabbi Isaac Dwek who heads the Synagogue of Deal. The junior Dwek was arrested in 2006 for a $50 million bank fraud, with more than 80 banks, corporations and individuals claiming that Dwek owed them more than $338 million.

Rabbis Arrested for Laundering Tens of Millions in NJ Corruption Probe

The money laundering network operated by the arrested rabbis laundered "at least tens of millions of dollars" through charities also controlled by the arrested rabbis, Saul Kassen, Eliahu Ben Haim, Edmund Nahum, Mordechai Fish and Lavel Schwartz. The arrested rabbis received fees equaling approximately five to ten percent of each transaction. Acting U.S. Attorney Ralph Marra noted that typical transactions ranged from tens of thousands to hundreds of thousands of dollars and the arrested rabbis often engaged in multiple transactions in the span of a week.

The breadth of the money laundering operation reached from New York and New Jersey into Israel. Israeli Levi Deutsch was also arrested in the money laundering case. Deutsch traveled between New York and Israel and provided cash from the international diamond trade and other sources for use in the money laundering transactions.

Earlier Arrests of Hasidic Rabbis for Money Laundering

The New York-Israel money laundering operation, strongly associated with the international diamond trade, has long been known to Federal investigators. Billions of dollars in dirty money is laundered through money washers in New York each year, and Hasidic rabbis have long been key players. The reach of this international money laundering scheme extends into countries around the world.

Saul Kassen, Eliahu Ben Haim, Edmund Nahum, Mordechai Fish, and Lavel Schwartz are only the latest in the chain of rabbis arrested in connection with massive money laundering schemes.

In 1998, Federal agents arrested two Hasidic rabbis, Bernard Grunfeld of Bobover Yeshiva and Mahir Reiss, for laundering money for the Colombian Medellin drug cartel. Both were convicted. Reiss, the ringleader, was sentenced to 27 months in jail and fined $6.3 million

In 1994, Hasidic Rabbi Abraham Low of Los Angeles was arrested in connection with a $2 million money laundering scheme in which dirty money was funneled through diamond outlets in New York. Low was ultimately convicted and sentenced to 5 years in prison.

In 1984, Hasidic rabbis Mendel Goldenberger and Israel Eidelman of Tiferith Yerushalayim in New York were arrested and convicted on charges relating to the laundering of $23 million for the Kali drug cartel.

This Jewish Tribal Review article citing source articles in major newspapers and elsewhere offers an illuminating discussion of the history of the involvement of Hasidic rabbis in money laundering through the use of the international diamond trade, religious charities and religious educational institutions.

Sources: http://www.thejewishweek.com/viewArticle/c37_a16367/News/National.html; http://abcnews.go.com/US/WireStory?id=8154989&page=1; http://www.usdoj.gov/usao/nj/press/press/files/pdffiles/bidrig0723%20rel.pdf; http://www.afp.gov.au/about/publications/platypus_magazine/platypus_magazine_previous_editions/1998/march_1998/washing.html; http://cases.justia.com/us-court-of-appeals/F3/186/149/569380/; http://www.jewishtribalreview.org/23drug.htm; http://holywar.org/jewishtr/crirabb.htm; http://www.nytimes.com/1997/06/17/nyregion/rabbis-listed-among-suspects-in-laundering-of-drug-profits.html; http://www.radioislam.org/islam/english/toread/laundry.htm; http://www.nj.com/news/index.ssf/2009/07/cooperating_witness_solomon_dw.html.