Rabbi Yisroel Goldstein walks towards a press conference with Poway Mayor Steve Vaus, April 28, 2019. (Photo/JTA-Sandy Huffaker-AFP-Getty Images)
Rabbi Yisroel Goldstein walks towards a press conference with Poway Mayor Steve Vaus, April 28, 2019. (Photo/JTA-Sandy Huffaker-AFP-Getty Images)

Hero rabbi in Chabad of Poway shooting gets jail time

This piece first appeared in the Forward.

In a stunning decision, a federal judge sentenced former Chabad of Poway rabbi Yisroel Goldstein to 14 months in prison for tax and wire fraud on Tuesday, overriding prosecutors’ sentencing recommendations of house arrest and providing a measure of relief to a community still reeling from a deadly shooting at the synagogue in 2019.

Federal prosecutors had recommended a sentence of eight months of home confinement and four years probation, seeking leniency for Goldstein due to his cooperation with investigators and for his leadership following the attack.

But Judge Cynthia Bashant, who has sentenced nearly a dozen defendants involved in Goldstein’s sprawling conspiracy, rejected that possibility from the outset.

“You dragged so many people down with you,” Bashant told Goldstein. “And so many of those people thought they were helping Chabad. But really it was just to benefit you, and I can’t ignore that fact.”

The judge also ordered Goldstein to pay approximately $2.8 million in restitution.

Though not all of Goldstein’s co-conspirators have been revealed, both the synagogue he led — which is now run by his sons — and Chabad Headquarters, which banished him from the movement, will look to the sentencing as the conclusion of an ugly saga that severely depleted the membership of the once-thriving community.

Many longtime members, still living in Poway, say their trust cannot be regained, and that they are gone for good.

In addition to defrauding taxpayers, Goldstein ripped off the Federal Emergency Management Agency, the California Office of Emergency Services and a few of San Diego’s most prominent employers, using Chabad of Poway and an affiliated nonprofit for children with disabilities to do it.

Former congregants who attended the hearing were buoyed by Tuesday’s ruling. Among them was the daughter of Lori Kaye, the beloved congregant who was killed in the 2019 attack.

A photo of Lori Gilbert-Kaye at the Chabad of Poway, May 3, 2019. (Photo/JTA-Gabrielle Birkner)
A photo of Lori Gilbert-Kaye at the Chabad of Poway, May 3, 2019. (Photo/JTA-Gabrielle Birkner)

“I would like to express my gratitude to the court and to the justice system for favoring a prison sentence and holding him to the highest standard that the law will permit in this case,” said Hannah Kaye, addressing the court shortly before sentencing. “We were bracing ourselves for a different result.”

Yisroel Goldstein got his first taste of grift in the 1980s, when he helped a congregant at his fledgling Chabad synagogue write off a sham donation — in exchange for a tenth of the amount claimed, a tax fraud authorities referred to as the ‘90-10’ scheme.

In the ensuing decades, as Chabad of Poway graduated from a tiny storefront to one of the largest synagogues in the San Diego area, the rabbi’s schemes enfolded more of his community, and grew more complex.

In one, Goldstein exploited Friendship Circle of San Diego, an affiliated nonprofit that serves disabled people and their families, to loot corporate donation-matching programs. People would donate money to Friendship Circle, the corporations would match it. The rabbi then refunded the original donation to the individual and kept the matching donation for himself.

In another scam, he used fake invoices to obtain federal emergency grants for earthquake damage that never occurred.

Later, he secured government funding to bolster the synagogue’s security, but never made the upgrades. That failure loomed larger after April 27, 2019, when a man steeped in white nationalist ideology walked in the front door with an assault rifle and opened fire, killing Kaye, 61, and injuring three others, including Goldstein, who lost a finger in the attack.

By then, Goldstein was already cooperating with a joint FBI and IRS investigation into a conspiracy that involved dozens of people, many of them his congregants, and which included his brother Mendel Goldstein, who lives in Brooklyn.

A family of a different victim is now suing Goldstein, Chabad of Poway and Chabad of California over alleged misappropriation of the security funds. The shooter, John T. Earnest, was sentenced to life in federal prison in December.

In total, Goldstein admitted to signing off on about $6.2 million in false tax deductions in the 90-10 scheme; $875,000 in grant fraud, and $134,000 via donation matching.

Addressing Bashant and the packed courtroom from prepared remarks Tuesday, Goldstein said, “Today, I stand here in shame. My good name and all the positive I’ve done and planted over decades are destroyed due to my terrible deeds.”

Goldstein became the 11th defendant sentenced as part of the conspiracy, but with another dozen it seems unlikely he will be the last. The focus of the prosecution now turns to two mystery defendants described in Goldstein indictments as religious leaders based in San Diego but identified only by their initials. One of them is identified as Y.F.

Louis Keene
Louis Keene

Louis Keene is a staff reporter at the Forward. He can be reached at keene@forward.com or on Twitter @thislouis.


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