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Brother Of Ex-Chabad Of Poway Rabbi Pleads Guilty To Tax Evasion Charges

A San Diego county sheriff's deputy stands in front of the Chabad of Poway synagogue, Sunday, April 28, 2019.
Associated Press
A San Diego county sheriff's deputy stands in front of the Chabad of Poway synagogue, Sunday, April 28, 2019.

The brother of ex-Chabad of Poway Rabbi Yisroel Goldstein pleaded guilty Monday to federal tax evasion charges for his role in a scheme that was committed with his sibling's help and involved concealing more than $700,000 in earnings from the Internal Revenue Service.

Mendel Goldstein, 63, of Brooklyn, New York, admitted in San Diego federal court to 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 Goldstein, 58, would keep 10% of the deposited income as a fee, prosecutors said.


Mendel Goldstein, who saved about $155,881 in taxes through the scam, is scheduled to be sentenced on Dec. 14, with the charges carrying a maximum possible penalty of five years in prison, the U.S. Attorney's Office said.

"People who cheat on their taxes are cheating all honest taxpayers," said U.S. Attorney Robert Brewer. "We will not tolerate the exploitation of non-profit and religious organizations to line the perpetrators' pockets at society's expense."

RELATED: Rabbi Hurt In Poway Synagogue Shooting Admits Tax Fraud

Yisroel Goldstein and two others were wounded in the April 27, 2019, shooting at Chabad of Poway that killed congregant Lori Gilbert Kaye. The alleged shooter, nursing student John T. Earnest, 21, remains in custody on state and federal charges, including allegations that the attack was a hate crime.

Prosecutors say the rabbi was under investigation prior to the shooting for a number of fraud schemes, including one in which he funneled supposedly charitable donations made to the synagogue back to donors. Similar to the agreement with his brother, Goldstein kept about 10% of the donations and sent the remainder back to the donors, prosecutors said.


The U.S. Attorney's Office said that once he discovered he was under investigation, he alerted his older brother and advised him to hide the tax evasion by filing delinquent tax returns.

Goldstein pleaded guilty to wire fraud and conspiracy charges in July along with five co-defendants, and prosecutors say he has agreed to cooperate against others potentially involved in the fraud.

The U.S. Attorney's Office said it will recommend probation at Goldstein's sentencing next April. He has also agreed to pay $2.5 million in restitution as part of the plea agreement.

Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office, said, "This investigation uncovered a conspiracy of crimes involving fraud, deception and evasion that used the cloak of a tax-exempt religious organization, the Chabad of Poway, for personal financial benefit."

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