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Another Win for NY AG Schneiderman

imagesNew York Attorney General Eric T. Schneiderman is following his big win earlier this month with a $522,000 pay out from a Brooklyn rabbi who collected hundreds of thousands of dollars for fake charities.

Rabbi Yaakov Weingarten pled guilty in NY State Supreme Court to felony tax fraud for soliciting donations from thousands of donors for phony charities. He solicited donations for 19 totally made up Israeli charities, which he claimed helped needy Israelis, including the sick, the poor, cancer victims, and victims of terrorism. He admitted, “none of the money I collected . . . went to these entities, because they did not exist.”

Weingarten instead used the donations to pay his mortgage, home improvement payments, and cable and electric bills.

Under the terms of the settlement, approximately $360,000 will be donated to the UJA-Federation of New York. The Federation will in turn make grants to two Israeli charities: Schneider Children’s Medical Center of Israel, a pediatric hospital, and United Hatzalah of Israel, a fully volunteer Emergency Medical Services organization. The remaining settlement money will be paid to the State of New York and will cover civil fines and penalties.

Weingarten is also permanently barred from charitable fundraising in the State of New York.

Continuing the string of charity scandals hitting New York, former CEO of Metropolitan Council on Jewish Poverty, William Rapfogel, was recently sentenced to 3 1/3 to 10 years in prison and ordered to pay $3 million in restitution for stealing from the organization. Investigators from Schneiderman’s office found that Rapfogel took more than $3 million “to fund a lavish lifestyle.”

A recent Chronicle of Philanthropy opinion piece urges “nonprofit leaders and boards of directors to step up and take the risk of confessing to abuses of funds and other serious misdeeds.” Already a difficult task, nonprofits must support independent oversight. How are the leaders of your nonprofit encouraged to speak up when they see bad deeds?