N.J. Man Admits Operating Charity as Illegal Bank
April 24, 2014 | Read Time: 1 minute
The operator of a sham charity that defendants in a massive New Jersey corruption case used to stash assets pleaded guilty Wednesday to tax evasion and operating an unchartered bank, reports The Star-Ledger of Newark.
Moshe “David” Schwartz acknowledged that he ran Gemach Shefa Chaim—ostensibly an organization created to make interest-free loans to needy members of a Hasidic community in Union City, N.J.—as a bank, accepting millions of dollars in deposits and hiding them from federal and state authorities.
Gemach Shefa Chaim was ensnared in a July 2009 federal sting that saw more than 40 people, including several rabbis and New Jersey politicians, arrested on corruption-related charges. Mr. Schwartz faces up to five years in prison on the banking offense and up to three years on the tax charge, prosecutors said. Sentencing was scheduled for July 30.
