Nearby sat his wife, seeming on the verge of tears, accompanied by his two sons.

Grunfeld, 64, president of the Bobover yeshiva and an executive director of Bobov's New York institutions, said nothing as federal prosecutors charged him and 11 others in a conspiracy to launder millions of dollars in illegal drug profits for Colombian drug dealers through the bank accounts of the yeshiva and synagogue of Bobov. The largest Chassidic sect in Boro Park and the second largest in the state after Satmar, it has perhaps as many as 30,000 adherents.

The complaint charges that Grunfeld and Rabbi Mahir Reiss, 47, laundered tens of millions in drug money through the bank accounts of the Bobover Yeshiva, Congregation Eitz Chaim and Chaim Shel Shulem, believed to be a free-loan society and apparently located at the Bobover World Headquarters on 47th Street.

They are accused also of helping the drug dealers buy an airplane that is commonly used to transport illegal drugs.

The rabbis and others allegedly skimmed 15 percent to 18 percent of each transaction for themselves, federal officials said.

"Money launderers are indispensable partners of major drug traffic, and the cynical act of using religious institutions to conceal drug proceeds is particularly reprehensible," declared Zachary Carter, U.S. Attorney for the Eastern District of New York, in announcing the charges at the downtown Brooklyn courthouse Monday.

Reiss' lawyer, Susan Kellman, said: "It's clear the complaint is filled with a variety of gross distortions. In the end, my client will be vindicated."

Grunfeld and Reiss, as well as Reiss' brother Abraham, who also was charged, face up to 20 years in prison and $1.5 million in fines. They each were released on a $750,000 bond. Reiss secured his bond in part by committing his $3 million residence.

Reaction to news of the arrests on the streets of Boro Park was a mix of shock and anger. One resident, asked for comment, said testily, "Look elsewhere for a story."

Others, like Assemblyman Dov Hikind, who represents Boro Park, downplayed the fact that those arrested were rabbis, saying, "Everyone in this community is a rabbi."

Still others stressed that the matter should be seen in personal, not communal, terms. And still others surmised that Grunfeld may not have been fully aware that the money he was allegedly being asked to launder was connected to the drug trade.

But Assistant U.S. Attorney Lee Dunst said evidence indicated that "Bernard Grunfeld knew that this was the proceeds of drug trafficking or was deliberately closing his eyes, which under the legal standard makes him criminally culpable."

It is not the first time a Chassidic sect has been linked with the billion-dollar Colombian drug cartels.

In 1994, Satmar Rabbi Abraham Low, married to the niece of the Satmar rebbe, Rabbi Moshe Teitelbaum, was convicted for conspiring to launder drug money — part of an international network that laundered up to $5 million a week. Other cases have involved a Brooklyn shtiebel (elementary school) and a Lower Manhattan yeshiva.

A 100-page federal complaint announced charges that the rabbis and other Orthodox Jews joined with five New York members of a Colombian drug gang to launder $1.75 million in drug profits.

The complaint said Grunfeld was brought into the operation by Reiss, president of Realex Capital on Park Avenue, and his brother Abraham, a real estate executive from the Upper West Side.

In the complaint, Reiss is referred to by other defendants as "The Rabbi," "Uncle" or "Barbas," Spanish for "beard." Abraham Reiss was known also as "Roomie."

Nine others were also indicted Tuesday, the result of a three-year federal undercover operation that employed wiretaps and other devices, authorities said. Federal officials said the alleged Bobov-Colombian connection worked like this:

Three middlemen went from a Long Island home to Manhattan, where they would pick up the drug money from Colombian drug dealers. The three would bring the cash to a safe house, an apartment at 243 W. 75th St., to be counted. Investigators said Abraham Reiss would bring the money to Grunfeld, who would cut checks to people named on a list faxed to the Reiss brothers, according to Dunst, the assistant U.S. attorney prosecuting the case.

A key part of the scam, officials said, was the attempt to hide the bank transactions from federal authorities by keeping each check under $10,000 — the amount that triggers automatic review by federal banking officials.

The complaint charges that Grunfeld and Israel Knobloch, who was also charged, created the structure to divide $1 million into 95 separate deposits to avoid federal scrutiny.