New York Rabbi Pleads Guilty to Money Laundering

New Book and New Guilty Plea Cast Syrian Jewish Community Back in Spotlight
by Joy Resmovits

A prominent Syrian rabbi’s recent guilty plea and a new tell-all book that probes the underside of his insular community appear likely to confront Syrian Jews once more with a scandal that just won’t go away.

On Monday, March 28, Rabbi Saul Kassin, age 89, pleaded guilty to one count of unauthorized money transmitting – in layman’s language, money laundering. Kassin, who holds the title of chief rabbi of the community, confessed to using a charity he ran, the Magen Israel Society, to channel money from illegal sources and receive a 10% cut. Under a plea deal, the elderly cleric is expected to be spared jail time but to be put on probation and fined.

Kassin’s plea is the latest development in the aftermath of a sprawling FBI corruption investigation that has penetrated the large Syrian Jewish enclaves in Brooklyn and Deal, N.J. – a Jersey Shore town of large homes and expansive yards where many Syrian Jews summer. In both locales, the community is notable for its tight communal infrastructure, affluent members and high religious fences: in 1935, the Syrian community’s chief rabbi issued an edict forbidding marriage to converts to Judaism.

On the morning of July 23, 2009, five Orthodox rabbis were arrested for money laundering, including Kassin and two other Syrian religious leaders, as part of the largest undercover federal sting in New Jersey’s history.

The investigation alleged that the rabbis washed money from sources they knew to be illegal, returning the cash to the donors, less a 5% or 10% takeout.

At the time, Ted Sherman and Josh Margolin, two Pulitzer Prize-winning reporters at The Star-Ledger, in Newark, N.J., filled newspaper columns with stories about the shady characters connected to the scandal. And on March 15 they released “The Jersey Sting,” a book that chronicles the backroom meetings and seemingly innocuous public events that led to the perp walk taken by the community’s leaders.

“We were told over and over again: It’s bad for the Jews,” Margolin said, referring to the social pressures on the two reporters – both Jewish – to tone down their coverage. The yeshiva-educated Margolin, who attends services in Metuchen, N.J., regularly and sends his children to Hebrew school, said, “I say, given my background, I know that this should be written about.”

Since the July 2009 arrests, one of the other Syrian rabbis, Eliahu Ben Haim, has pleaded guilty to conspiring to launder about $1.5 million in funds that stemmed from illegal activities. Community members are raising money for the currently unemployed convict as he awaits his sentencing in May.

Meanwhile, Rabbi Edmund Nahum – whose case is pending – told the Forward over the phone, “I did nothing wrong.” He continues to lead Deal Synagogue from the pulpit and in prayer as its cantor.

In Brooklyn, Kassin awaits a July 12 sentencing that could leave him facing a fine of $250,000. He forfeited the $267,000 in assets that was frozen upon his arrest. A woman who picked up the phone at Kassin’s Congregation Shaare Zion in Brooklyn the day after his plea hung up after declining to comment as to whether Kassin continues to serve in the largely ceremonial role of chief rabbi.

“He continues to enjoy the support of the community,” said Gerald Shargel, Kassin’s lawyer. “Following his arrest, there has been an outpouring of support.”

Rabbi Moshe Shamah, who leads Brooklyn’s Sephardic Synagogue, said Kassin will continue his work as chief rabbi, a position he acquired via his father’s will, until the end of his life.

“He is a naïve person,” Shamah told the Forward. “As far as I knew, and everybody else knew, he handled charities as follows: if there was a charity that did not have a tax exemption, and he knew that it was a legitimate charity, he would take the donations to that charity and deduct 10%.” Kassin would then devote this cut to other charities he thought worthy, Shamah said.

According to Eli Greenberg, a New York attorney and Sephardic Community Federation board member, most of the community’s biggest charitable organizations have agreed since the scandal to adopt ethical guidelines, in response to a reform campaign he spearheaded. Greenberg has not yet replied to a later query as to whether the participating entities included charity funds controlled personally by the community’s rabbis, of the sort that Kassin used to launder money.

Greenberg’s compliance plan, which is designed to increase transparency, includes a code of ethics, a conflict-of-interest policy, a document-retention policy and a push to work in checks rather than cash. Greenberg said that most organizations were already functioning by these higher standards. He declined to provide a list of those organizations.

Several community members reached by the Forward say that little has changed. “The strong respect for the chachamim [scholars] will always be there, even if people may be slightly more skeptical,” one woman said. She was dismayed that community reaction seemed to center on criticizing the actions of Solomon Dwek, the Syrian Jew who was the government’s primary informant, rather than on the actual allegations of wrongdoing. “They criticized the rat before they criticized the problem,” she added.

Like other many others contacted who are members of the community, the woman insisted on anonymity to protect her from censure by friends and family.

Meanwhile, the new book by Sherman and Margolin promises to keep the Syrian rabbinic trio and the communities they led under the microscope as the authors make their rounds of radio appearances, lectures and book signings.

Based on interviews, transcripts of surveillance meetings, court records and sworn depositions – many of which are still under a tight court seal – “The Jersey Sting” paints a detailed picture of sprawling corruption in the Garden State.

The sting, known as Operation Bid Rig III, involved charges against 44 politicians, rabbis and laymen, including a kidney trafficker. Of those, 26 have pleaded guilty. “There is not a lot of heavy-duty negotiating now,” Margolin said. “The feds believe they have the laundering charges open and shut.”

The book also tells the story of Dwek, son of a prominent Syrian rabbi who was fired by Deal Synagogue shortly after news broke of his progeny’s key role in the sting. Dwek, who recorded his conversations with many of those arrested, agreed to be wired as part of a deal after his own arrest for a $5 million bank fraud scheme. “The Jersey Sting” describes the making of the Ponzi schemer, an average Joe who claimed under oath that he graduated high school only after he offered a teacher a $50 bribe to cover up a failed math class. Sherman and Margolin detail how communal respect for his family buoyed Dwek’s phony real estate projects and money laundering.

Sherman and Margolin were accustomed to cracking communities and sources known for being closed off. But this case stumped them. “As a reporter, so many times you think someone’s not going to talk, but they wind up talking,” Sherman said. “But it’s 100% closed.” They told the Forward they have no sense as to how the Syrian Jewish community will react, if at all.

A community member said he had not heard of the book but would like to read it. After visiting its website, he noted: “The way they present it is very sensationalist. This is going to further the perception that we are just a bunch of crooks.”

He added, “People are not going to be happy about this.”

This article originally appeared in The Jewish Daily Forward; reprinted with permission.