Fraud Scheme

La Jolla Man Sentenced For Tax Evasion Scheme With Former Chabad of Poway Rabbi

Charges have been filed against nine others in connection with the case, including Rabbi Goldstein, 58, who is slated for sentencing Oct. 26

Stefani Reynolds/Bloomberg via Getty Images

A retired La Jolla dentist who pleaded guilty to federal charges in connection with a charity fraud and tax evasion scheme involving former Chabad of Poway Rabbi Yisroel Goldstein was sentenced Monday to 15 months in custody.

Bruce Baker, 75, pleaded guilty to reporting more than $2.6 million in charitable donations over the course of several years, with around $2.4 million funneled back to him by Goldstein.

The former rabbi has also pleaded guilty to charges related to accepting charitable donations from various people, then returning about 90% of the funds back to the donors, while pocketing the remainder for himself and providing donors with fabricated receipts.

NBC 7 Investigates reporter Mari Payton breaks down the case against the former rabbi.

According to prosecutors, Goldstein did not return Baker's money to him directly, as done with others. Instead, the former rabbi made numerous payments on Baker's behalf, including paying Baker's creditors, paying his son's private school and dental school tuition and fees, giving money to Baker's relatives, and making other large purchases on his behalf, among other things.

Like the other donors, Baker filed false tax returns and pretended he was eligible for tax deductions for his purported donations to Chabad, resulting in a tax loss of more than $600,000, court documents state.

Baker also made a similar fake donation to another charity led by a San Diego religious leader identified only as Y.F. in court documents. According to a prosecutor's sentencing memorandum, Baker reported donating an ancient Iranian Torah valued at $1.2 million to Y.F.'s charity, though the Torah never actually existed.

Both the prosecution and defense's sentencing papers noted Baker's remorse over the crime, his age and his poor health in recommending what punishment he should receive.

NBC 7's Mark Mulled has the details of the guilty plea.

The U.S. Attorney's Office sought the 15 months in custody that was ultimately imposed, while Baker's counsel sought five years of probation, six months of home confinement and volunteer service, which Baker indicated could include free dental services for the poor and professional training for prospective dentists, according to the defense's sentencing memo.

U.S. District Judge Cynthia Bashant disagreed that Baker's age and infirmities should preclude him from a custodial sentence, saying, "It's very important to send a message to the community that if you do something like this, you will spend some time in custody."

Baker is slated to report to prison on July 28, according to the U.S. Attorney's Office.

With penalties and interest, the tax loss has grown to more than $1.3 million, and Baker has already paid more than $800,000 in restitution, according to the prosecution's sentencing memo.

FBI Special Agent in Charge Suzanne Turner said Baker and Goldstein "manipulated our laws designed to reward genuine charitable giving for their own benefit."

Ryan L. Korner, IRS Criminal Investigation Special Agent in Charge said, "The magnitude of Mr. Baker's tax evasion, which he committed over decades, is appalling."

Charges have been filed against nine others in connection with the case, including Goldstein, 58, who became a spokesperson for victims of an attack on his synagogue in 2019. He is slated for sentencing Oct. 26. A local real estate agent, Alexander Avergoon, 44, is due to be sentenced next month.

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