The New Jersey Scandal, Pt. 1: The Facts

Last week (July 23) in New Jersey, an undercover police operation revealed a rainbow of criminal dealings. The implications of the scandal vis-à-vis charities are too vast and far-reaching to be dealt with in one post.  Over the next day or two I will address the pertinent issues.  Questions and comments are welcome.

The Facts

Among the myriad accusations is the charge of the laundering of charitable donations totaling approximately 3 million dollars. The Jerusalem Post quotes sources saying that “at least some of the millions came from Israel” while the New York Times notes “much of the cash they provided him [the informant] came from Israel.” The Post explains that one of the rabbis detained “used a source in Israel to supply money through ‘cash houses’ [money changer].” The Post also quotes former Jerusalem Police Chief Mickey Levy who said Israeli authorities weren’t involved yet but didn’t rule out their involvement a later stage of the investigation.

To review:

  • Money donated to a US based charity that operates internationally was not used for charitable purposes
  • Some of this money was funneled through Israel
  • In Israel, some or all of the money was handled by a money changer
  • The Israeli police might become involved

What is Money Laundering?

A U.K. Parliament website defines money laundering as:

“The process by which the source of ownership of criminally derived wealth and property is changed to confer on it a perception of legitimacy. From the point of the criminal there seem to be three requirements:

  • The need to conceal the true ownership and origin of the proceeds;
  • The need to maintain control of the proceeds; and
  • The need to change the form of the proceeds.”

Articles about the Recent New Jersey Scandal

44 Charged by U.S. in New Jersey Corruption Sweep (New York Times)

Syrian Sephardic Communities Shaken by Charges Against a Leading Rabbi (New York Times)

Millionaire, Patron and Now Informant (New York Times)

How the corruption case unfolded (New York Times)

Laundered cash may be from Israel (Jerusalem Post)

Life Can Imitate Art: Indictments Describe Deals More Fit for a Crime Movie (New York Times)

Hoboken Mayor’s Fall From Reformer to Defendant (New York Times)

Israel Likely to Probe Alleged Money-Laundering Network (Jerusalem Post)

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Related Posts:

The New Jersey Scandal, Pt. 2: The Israel Fallout

The New Jersey Scandal, Pt. 3: The IRS Expected Response

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