Court: Some Money-Laundering Cash May be From Israel

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26/07/2009 The source of at least some of the millions of dollars involved in money-laundering by five of the rabbis arrested last week came from Israeli sources, The Jerusalem Post has learned.

According to court documents obtained by the Post, one of the rabbis detained, Eliahu Ben-Haim, used a source in Israel to supply money through “cash houses” in exchange for a 1.5 percent fee.

The FBI revealed that among the 44 people arrested on Thursday was a second Israeli accused of sourcing cash. Authorities arrested Levi Deutsch, charging him with funding the bank checks that passed through the rabbis’ charitable organizations, according to court documents.

Deutsch reportedly traveled frequently between Israel and New York, and told the FBI’s cooperating witness that his source of cash was the “diamond business” and “other things.” He also said he worked with a Swiss banker who charged “two, three points” per $1 million laundered through him.

As details emerged following the dramatic sting, it appeared that the FBI case hinged on a key cooperating witness, believed to be Solomon Dwek.

Dwek, a member of the Syrian Jewish community and the son of a prominent rabbi, Isaac Dwek, who is affiliated with Shas, was charged with bank fraud in 2006. Portrayed as a disgraced real estate mogul in media reports, Dwek was arrested by the FBI after he passed two $25m checks and immediately tried to withdraw $22m. One of the bad checks was deposited in a drive-up window at PNC bank.

Dwek was forced into bankruptcy, with creditors – including an uncle – demanding hundreds of millions of dollars.

But Dwek apparently began working with the FBI as a cooperating witness, infiltrating a money-laundering network in New Jersey and Brooklyn. The case also involved political corruption in New Jersey, when one of the money laundering suspects introduced Dwek to a building inspector who in exchange introduced him to public officials willing to accept cash for political favor. Dwek effectively posed as a shady real estate developer who passed money to lawmakers in exchange for support of his projects.

The massive scandal broke Thursday morning, when hundreds of federal agents stormed 54 locations, rounding up political figures and prominent rabbis on charges of money laundering and political corruption.

Prosecutors also charged Levy Izhak Rosenbaum, 58, of Brooklyn, for allegedly acquiring and trading human organs. According to prosecutors, Rosenbaum convinced people in Israel to donate their kidneys for $10,000 and then sold them for up to $160,000.

Among those arrested Thursday were Hoboken Mayor Peter Cammarano, Secaucus Mayor Dennis Elwell, Jersey City Deputy Mayor Leona Beldini, state Assemblyman L. Harvey Smith and state Assemblyman Daniel Van Pelt. Ridgefield Mayor Anthony Suarez, who is also an attorney, is charged with agreeing to accept an illegal $10,000 cash payment for his legal defense fund.

Cammarano said Friday he would not resign, and that the corruption charges filed against him were “baseless.” Cammarano is accused of accepting $25,000 in bribes from a federal informant posing as a real estate developer.

In the case against the rabbis, federal agents arrested Kassin; Ben-Haim, 58, rabbi of Congregation Ohel Yaacob in Deal; Edmond Nahum, 56, of the Deal Synagogue; Mordechai Fish, 56, of Congregation Sheves Achim in Brooklyn; and Lavel Schwartz, 57, Fish’s brother. They were charged with money laundering, and according to the FBI, earned “significant” sums, typically between five to 10% per transaction.

5 rabbis were accused of trafficking in human organs.
Most of the defendants facing corruption charges were released on bail. The money laundering defendants faced bail between $300,000 and $3 million, and most were ordered to submit to electronic monitoring.