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SAN DIEGO – A rabbi who was wounded last year during a deadly shooting at a Poway synagogue pleaded guilty Tuesday to federal tax and wire fraud charges, prosecutors said.

Yisroel Goldstein, 58, admitted taking part in a scheme where donors who gave large amounts of money to Chabad of Poway secretly got most of their money back, U.S Attorney Robert Brewer said. The donors then claimed the full amount as a charitable contribution, and Goldstein, who controlled Chabad’s finances, kicked back 90% of the donation and kept 10% for himself, Brewer said.

90-10 Fraud

Investigators called this scheme the “90-10 fraud.” Over the course of several years, Goldstein accepted at least $6.2 million in fake donations from at least 18 taxpayers and kept $620,000.

Goldstein also pleaded guilty to two other fraud schemes. One involved scamming corporations of matching donations to Chabad or charities controlled by the rabbi, Brewer said. Corporate employees taking part in matching donation programs would give Goldstein money, which he secretly funneled back to them, while keeping the matching donation amounts provided by the corporations, according to Brewer, who said at least six employee co-conspirators took part in that scheme from 2010 to 2018.

Another scheme involved submitting fraudulent invoices to the Federal Emergency Management Agency, California Office of Emergency Services and other entities in order to obtain grant funding.

Brewer said on one occasion, fake invoices were created on behalf of a fictitious construction company, in order to complete repair work on properties supposedly damaged by the 2007 San Diego wildfires. However, Brewer said the damage was entirely fictional.

Other grants received by Goldstein were purportedly to go toward improvements or repairs to Chabad, but were instead kept for personal use, according to the criminal complaint.

“Sadly, the facts of this case show a willful effort to deceive on the part of a trusted community leader,” Brewer said.

Goldstein cooperated with investigators

The federal fraud investigation into Goldstein and his co-conspirators began in November of 2016, Brewer said. Goldstein became aware of the investigation when search warrants were served on his home and Chabad of Poway in October 2018. After those searches, Goldstein began cooperating with FBI and IRS investigators to explain the complex frauds he participated in, Brewer said. As a result of his cooperation, five co-conspirators also pleaded guilty to tax and wire fraud charges, he said.

Goldstein came to national prominence after being wounded along with two others in the April, 27, 2019, shooting at Chabad that killed Lori Gilbert-Kaye.  

Goldstein was interviewed frequently in the news coverage following the shooting. He was even invited to the White House to take part at a National Day of Prayer event with President Donald Trump, where he spoke in praise of the president.  

Prosecutors recommend probation for rabbi

Brewer said the U.S. Attorney’s Office will recommend probation at Goldstein’s sentencing, though the punishment ultimately rests with a judge. Goldstein has also agreed to pay $2.5 million in restitution.

“There is no doubt that Rabbi Goldstein was the victim of a horrific hate crime that terrorized him and the worshippers at the Chabad in April of 2019. That event was a significant, mitigating factor to the plea agreement, but it is no excuse,” Brewer said.

“We cannot look the other way because a perpetrator of a crime becomes, suddenly, a victim of crime,” he said. “We commend Mr. Goldstein in his community leadership after the shooting, as well as his cooperation once this investigation came to light. But the illegal conduct had occurred for many years and it cannot be ignored.”

Chabad of Poway releases statement

Chabad of Poway released a statement shortly after the U.S. Attorney’s Office announced Goldstein’s plea.

“This is a very painful time for our congregation,” the statement reads. “Following the attack on our synagogue last year, when we were frozen with shock and fear, Rabbi Yisroel Goldstein brought us together and inspired our community. That was the Rabbi Goldstein we knew. That was the Rabbi Goldstein the world came to know.

“Yet, we’ve since learned that Rabbi Goldstein violated the law, contradicted what our synagogue stands for, and transgressed the very moral and ethical rules of the Torah he taught.”

Upon learning of the allegations “some months ago,” the synagogue conducted an “internal review,” after which Goldstein was removed from his duties at the Chabad.

“We hope and pray that Rabbi Goldstein finds the professional help that he needs and makes amends to our country and to the people he has hurt. And we pray that the Goldstein family find the healing they so deserve.”

John Earnest, a 20-year-old San Diego resident, has been charged with murder, hate crimes and other chargers for the synagogue shooting.