LAWFUEL – A Los Angeles man who made “donations” to several charitable organizations associated with a New York-based orthodox Jewish group – “donations” that were largely refunded – has agreed to plead guilty to federal tax evasion charges.
In a plea agreement filed today in United States District Court in Los Angeles, Uri Mandelbaum, 70, of the Hancock Park district of Los Angeles, has agreed to plead guilty to two felony tax charges and to pay back taxes totaling more than $1.5 million.
The plea agreement with Mandelbaum is the first one involving a “donor” to charitable organizations associated with Spinka, which is at the center of a scheme alleged in a related criminal case. Spinka is a religious group within Orthodox Judaism based in Brooklyn, New York. The Grand Rabbi of Spinka, his assistant, several other defendants and five Spinka charities were indicted last year on a host of federal charges related to a wide-ranging conspiracy to defraud U.S. government agencies, to operate an underground money transfer system and to launder money through an Israeli bank (see: http://www.usdoj.gov/usao/cac/pressroom/pr2007/164.html). According to statements made during court during proceedings in that case, prosecutors have expanded their investigation, which now targets more than 100 individuals who were contributors to Spinka organizations.
In the plea agreement filed today, Mandelbaum admits that he evaded the payment of $296,731 in federal income taxes for the years 2005 and 2006, the two years that are the subject of the criminal charges. During 2005 and 2006, Mandelbaum made $892,483 in contributions to Spinka organizations, and then 95 percent of the contributions were returned to Mandelbaum. However, Mandelbaum admits that he claimed the entire $892,483 as charitable contributions on his federal income tax returns for the two years.
In the plea agreement, Mandelbaum also admits that he made contributions to Spinka-related entities from 2001 through 2004 that were reimbursed at a 95 percent rate. During those four years, Mandelbaum admits that hundreds of thousands of dollars went through the Spinka organizations, resulting in tax losses of $1,285,591.
Mandelbaum additionally admits that he received cash from Spinka organizations in order to give kickbacks to other contributors. During 2005 and 2006, Mandelbaum received $662,068 in cash that he relayed to others, according to his plea agreement.
Mandelbaum has agreed to appear in federal court in Los Angeles for an arraignment on July 28.
The statutory maximum penalty for the two counts of tax evasion is 10 years in federal prison and a $500,000 fine.
Two of the defendants charged in the main Spinka indictment have pleaded guilty (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/091.html). The other defendants are scheduled to go on trial before United States District Judge George P. Schiavelli on November 12.List your legal jobs on the LawFuel Network