Thanks for your great post.
The Deal Yeshiva reported some $10 million income in 2004 alone---donations from congregants who are Dwek (cough) investors. Now they accuse Dwek of defrauding them of well over $100 million in Dwek's various “real estate investment-tax evasion” schemes.
DUH.
The super-rich congregants reside in lavish beachfront mansions in nearby Deal, winter in luxury Palm beach estates (and many of the "disadvantaged" have a third home in sunny Brooklyn).
PALM BEACH? Let us hope these are not the self-same "investors" who got wiped out by the Madoff affinity scam (/snic).
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P> The tax-exempt dimension to Dwek’s fraud is as fishy as Madoff’s fraud. Madoff was pocketing millions from numerous so-called tax-exempt religious instititions, charities, and family foundations: The Picower Foundation, The Chais Family Foundation, Robert I. Lappin Charitable Foundation, Steven Spielberg's tax-exempt Wunderkind Foundation, tax-exempt Yeshiva University, the Kehilath Jeshurun synagogue, the Maimonides, Ramaz and SAR day schools---and more---all “invested” with Madoff.
The landscape is littered with these "foundations and charities." Investigators need to determine why Brooklyn, NY residents registered some 800 tax-exempts in Lakewood-----a small flea-bitten central New Jersey town.
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The IRS has asserted that tax-exempt "foundations and charities" are the locus classicus for tax evasion and IRS fraud.
Investigators may be looking at the legal parameters of prosecutable crimes including making false statements to state and federal officials, filing falsified documents, obstruction of proceedings before state and federal agencies, fiduciary negligence, and obstruction of US justice.
The tax-exempt's might have facilitated IRS fraud by integrating:
1. Secret control over tax-exempt fund-raising committees.
2. Requiring only one signature on tax-exempt bank checks.
3. Utilizing pre-signed tax-exempt bank checks.
4. Using secret bank accounts to keep secret the actual financial position of the tax-exempt.
5. Assigning bank deposit and account reconciliation functions of tax-exempts to one person.
6. Conspiring to hide oversight of expenses and supporting vouchers from public view.
7. Having no outside auditor to review tax-exempt statements.
8. Cashing unusually large amounts of tax-exempt checks.
9. Having no official tax-exempt’s deposit and withdrawal control system.
10. The Biggest Fraud---tax exempts writing checks to other tax exempts (siphoning off tax-free money for themselves).
Authorities should investigate investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva's US Postal Service mailings, wire transfers, computer transfers, electronic submissions, and unregulated money transfers, and all bank transfers connected to secret tax-exempt bank accounts.
Fraudulent tax-exempt activities might have involved using checks passed from one account to another in multiple conspiracies to launder monies.
The stratagem could have been international in its scope due to Dwek's worldwide connections.
Authorities need to determine the extent to which donors to the tax-exempt Deal Yeshiva colluded in schemes that may have included misusing reserve bank accounts, concealing transfers, inflating asset values and improperly accounting for transactions.
A formal inquiry should be conducted into investors in investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva and their financial activities with officers of publicly-held companies, including (1) Enron-style accounting frauds by manipulating tax-exempt records, (2) bundling contributions into the pockets of politicians, (3) the extent to which networks of companies are financing political candidates in the names of business partners without their knowledge or consent, (4) the extent to which officers of publicly-held companies used accounting fraud to hide illegal campaign contributions, and, (5) the extent to which campaign donations exceeded campaign-finance limits.
Charges might include tax-exempt accounting managers misappropriating funds to cover personal expenses, fraudulently overcharging for management services, diverting non-profit funds, then converting them to campaign accounts, or in the style of WorldCom greed spending thousands of non-profit dollars on organization credit cards for personal expenses.
A formal inquiry should be undertaken with respect to investors in investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva, their relatives, associates, co-conspirators or subsets of them, and donors (particularly officers of publicly-held companies), the business dealings between recipients, employees and elected and appointed officials and the extent to which influence-peddling is taking place, and more specifically the extent to which relatives, associates, and principles of investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva and their co-conspirators or subsets of them, directed political activities from tax-free non-profit organizations in illegal arrangements.
The BIGGEST FRAUDS are between TAX-EXEMPT AND TAX-EXEMPT.....writing checks to each other (the MO for laundering tax-exempt monies).
Authorities need to determine the extent to which investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva and whether they illegally used philanthropic transactions, such as:
(1) loans, the (2) sale, (3) exchange or (4) leasing of property to related organizations, and donors, and the extent to which organizations reported (5) "excess benefit transactions" on Form 990, and, (6) the extent to which executive pay was properly accounted for with the IRS.
Investors in investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva need to reveal the dimension of contributions these organizations that may have been illegally redirected to political activity and be requested to explain:
(1) how investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva solicited contributions,
(2) how donations are made, and,
(3) the manner in which donors (particularly officers of publicly-held companies allocated company assets) are solicited.
Investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva should be asked for details about who inside, and outside, these organizations is soliciting contributions, how the various subcommittees are funded, and the extent to which investors in Dwek's realty schemes connected to the tax-exempt Deal Yeshiva, (particularly officers of publicly-held companies) are colluding to perhaps finance political campaigns surreptitiously, and are engaging in other illegal transactions.