The brother of former Chabad of Poway Rabbi Yisroel Goldstein was sentenced Friday to eight months in prison for taking part in a scheme with the ex-rabbi to conceal more than $700,000 in earnings from the Internal Revenue Service.
Mendel Goldstein, 64, of Brooklyn, New York, pleaded guilty to federal tax evasion charges for depositing money earned through his freelance videography business into Chabad bank accounts, which Yisroel Goldstein funneled back to him through checks signed to fictitious people such as "Mr. Green," "Mr. Gold" or "Mr. Fish," according to the U.S. Attorney's Office.
The scheme began in 2012, with an agreement that Yisroel would keep 10% of the deposited income as a fee, prosecutors said. Mendel, who saved $155,881 in taxes through the scam, was alerted by his brother in 2018 that a criminal investigation was ongoing and advised to hide the tax evasion by filing delinquent tax returns.
Yisroel was sentenced earlier this year to 14 months in prison for his roles in a series of fraudulent schemes, most notably a tax fraud in which supposed charitable donations made to the synagogue were funneled back to donors.
Assistant U.S. Attorney Michelle Wasserman said in court that unlike other defendants charged in the fraudulent donation scheme, Mendel Goldstein did not merely seek to reduce his tax burden, but avoided paying taxes entirely for six years.
His attorney, Gary Burcham, wrote in defense papers that the conduct in the case "represents a marked departure from the way Mr. Goldstein has conducted himself over the past six decades."
Burcham sought four years of probation, with six months of home confinement, citing his client's remorse and health concerns as factors that would support a non-custodial sentence. The defense attorney also said that paying back the substantial restitution would be difficult given that Mendel Goldstein's videography business was greatly impacted by the coronavirus pandemic.
U.S. District Judge Cynthia Bashant said she felt custody was warranted, saying "this was not a one-time offense" and that Goldstein had "a lot of opportunities to back out."
In addition to eight months of custody, she ordered three years of supervised release and 75 hours of community service. Mendel Goldstein was ordered to self-surrender late next month.