SAN DIEGO -- The longtime leader of a Southern California synagogue who was wounded in a deadly attack at the house of worship he founded pleaded guilty Tuesday to participating in a multimillion-dollar fraud that disguised charitable contributions for personal gain.
Rabbi Yisroel Goldstein faces a maximum sentence of five years in prison for fraud but prosecutors will recommend probation as part of a plea agreement. They noted his cooperation with investigators after federal agents raided his home and office in October 2018 and his widely praised response to the attack on the Chabad of Poway synagogue in April 2019.
Robert Brewer, the U.S. attorney in San Diego, said it was “a very difficult day for all of us.”
“His role after the 2019 terrorist attack was exemplary,” Brewer said at a news conference. “He became a significant advocate for peace and elimination of violence based on religious hatred. He spoke all over the world and sent a strong message of peace.”
Goldstein, 58, lost his right index finger in the attack on the last day of Passover, which killed one congregant, Lori Gilbert-Kaye, and injured the rabbi and two others. The rabbi received an outpouring of support that included meeting President Donald Trump at the White House.
John T. Earnest, 20, has been charged in the attack in state and federal court. He has pleaded not guilty to hate crime-related murder, attempted murder and other charges.
Goldstein, who founded Chabad of Poway near San Diego in 1986, collected $6.2 million in fake donations to the synagogue and affiliates and returned 90% to contributors with phony receipts, allowing them to deduct the full amount from their taxes, prosecutors said. Goldstein kept the remaining 10%, or $620,000, for himself.
Goldstein acknowledged concealing a fake donation of more than $1.1 million in late 2017 by purchasing about $1 million in gold coins and giving them to the phony donor.
“We call this the 90-10 tax fraud scheme,” Brewer said.
Goldstein acknowledged defrauding three unnamed Fortune 500 companies out of $134,000 for matching employee donations. The employees deducted the fake donations from their taxes, and Goldstein kept the corporate donations for himself. One firm was identified in the plea agreement as a San Diego-based telecommunications company, an apparent reference to Qualcomm Inc.
The rabbi also admitted taking about $185,000 from the Federal Emergency Management Agency and California Governor's Office of Emergency Services by submitting fake invoices. Brewer said they were related to 2007 wildfires.
Goldstein acknowledged in his plea agreement that his crimes dated back to at least 2010. But Brewer said they began in the 1980s.
Chabad-Lubavitch, an organization that counts more than 3,500 institutions worldwide, called the news “terribly shocking and troubling.” It said those around Goldstein “have already experienced more devastation than anyone should ever know" and prayed "their faith and resilience strengthens them in this difficult time as well.”
Chabad-Lubavitch said it relieved Goldstein of his duties at Chabad after learning of the allegations late last year.
“While the messenger was clearly more flawed than any of us knew, the teachings remain timeless and enduring. Now more than ever we must learn them and live by them,” the organization said.
In November, citing exhaustion, Goldstein retired from the leadership of Chabad of Poway. One of his sons now leads the congregation.
At least 20 people were involved in the schemes and the investigation is ongoing, prosecutors said. Besides Goldstein, five others pleaded guilty in federal court this week, including Alexander Avergoon, whose real estate dealings sparked the investigation in November 2016.
Avergoon, 44, was arrested in Latvia and extradited to face charges.
Prosecutors described Chabad of Poway as a victim because the synagogue never received donations that they believed they had.
Goldstein also agreed to forfeit $1 million, pay $2.5 million in restitution and continue cooperating with investigators. He is scheduled to be sentenced Oct. 19.
Emily Allen, an assistant U.S. attorney, said his message of tolerance and love in the shooting's aftermath helped heal the congregation and resonated around the world.
"He had another side in which he undeniably devoted much of his life toward serving others,” Allen said.
This story has been corrected to show Goldstein allegedly kept 10% of donations, not synagogue.