A former Qualcomm director who pleaded guilty to evading thousands of dollars in taxes through the wide-ranging donation fraud scheme involving former Chabad of Poway Rabbi Yisroel Goldstein was sentenced Monday to four years of probation and six months of home confinement.
Jason Ellis, 42, of Poway, admitted to evading more than $27,000 in taxes by donating money to nonprofit entities associated with the Chabad, funds which Goldstein returned to Ellis. Prosecutors said that when Ellis made his donations, he requested that Qualcomm match his supposed donations through the company's corporate matching program.
The U.S. Attorney's Office said Ellis first made a $1,000 donation in 2008 and Goldstein returned the entirety of the donation to him, while keeping the fraudulently matched Qualcomm donation. Ellis and Goldstein carried out that arrangement through 2017, though Ellis' donation amounts increased in 2016, as he was promoted at Qualcomm, meaning the company would match up to $5,000 in charitable donations.
The U.S. Attorney's Office said Qualcomm matched a total of $18,000 in donations.
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Prosecutors also say Ellis falsely claimed his children's preschool tuition at the Chabad — which totaled $55,600 — as a charitable deduction on his taxes.
Ellis, who stopped working for Qualcomm in February, pleaded guilty this summer to a count of filing a false tax return.
At sentencing, Ellis told U.S. District Judge Cynthia Bashant that he was "tremendously embarrassed" for his part in the case, and said, "I have tarnished my name."
Ellis' attorney, Robert Schlein, argued for a one-year term of unsupervised probation due to his client's remorse over the crime, his efforts to pay back the money owed to the IRS and Qualcomm, and his travel requirements at his new job.
Schlein wrote in a defense sentencing memo that his client was "essentially guilted" into making donations to the Chabad as a way of participating in "Tzedakah," a Jewish obligation towards charity and giving. However, Schlein concedes that "once he began to receive the money back, he realized that what he was doing was wrong."
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Federal prosecutors, who recommended the probation and home confinement terms imposed by the court, wrote in a sentencing memo that though his conduct was "serious" and "brazen," his involvement in the scheme was relatively small compared to other defendants and he has already repaid his former employer and the IRS. However, the U.S. Attorney's Office denied that Ellis was led astray by religious obligations, stating that "greed, opportunity, and the assumption that he would not get caught are the only rational explanations for Ellis' conduct."
The case against Ellis mirrors others made against defendants whose donations to the Chabad and other affiliated organizations were funneled back to them.
Ellis was the ninth defendant to plead guilty to involvement in the scheme, including Goldstein.
