New York Hasidic group charged with racketeering
By Gail Appleson, Law Correspondent
NEW YORK, March 29 (Reuters) - Fourteen members of an ultra-orthodox Jewish community have been
indicted for cheating individuals, banks and insurance companies out of millions of dollars, federal
prosecutors said on Thursday.
According to a 68-count racketeering indictment, unsealed in federal court in White Plains, New York, the
defendants were based in the Hasidic Village of Kiryas Joel, located in Orange County, 40 miles (65 km)
northwest of New York.
The indictment alleges the group carried out "a myriad" of financial frauds since 1996, including soliciting
individuals for bogus lotteries, defrauding banks with counterfeit checks, submitting false death claims to
insurance companies and using false information to get tax refunds.
Prosecutors alleged the men carried out their schemes by using an "elaborate web of false information" that
included individual and corporate false identities, fake Social Security and tax identification numbers.
Telephone lines were allegedly routed through a complex telecommunication maze equipped with call
forwarding and voice mail systems, and numerous postal and commercial mail boxes. The indictment
charged that the profits of the scheme traveled through a network of domestic and international bank
accounts.
Prosecutors referred to the racketeering enterprise as the "Samet Group" after a key defendant Mordechai
Samet, 40, who is charged with 51 counts. Among them are two counts of racketeering that each carry up to
20 years in jail.
In one scheme, Samet and four other defendants allegedly defrauded banks by using counterfeit checks
totaling more than $6 million. The group allegedly opened commercial bank accounts in the name of bogus
businesses and deposited checks into those accounts. The checks allegedly either bore invalid bank routing
numbers, forged endorsements or were drawn on the proceeds of other counterfeit checks deposited in other
bank accounts.
Before the banks discovered the fraud, the group had already transferred the funds out of the accounts, often
overseas, leaving the banks unable to recoup their losses. The indictment charges that the scheme netted
nearly $2 million.
Samet is alleged to have paid premiums on life insurance policies with a total face value of nearly $3 million
issued in the names of real and fictitious people with invalid Social Security numbers. He then allegedly
submitted false death claims for individuals and obtained about $1.2 million from the scheme.
The indictment alleged that state and federal tax authorities were also swindled by the group. In one scheme,
some of the defendants filed hundreds of tax returns in real or fictitious names falsely claiming federal earned
income tax credit that is meant to benefit low income earners.
In an international tax scheme, Samet allegedly obtained hundreds of taxpayer identification numbers for
purported citizens of Canada and Israel and used the information along with phony passports to claim
hundreds of bogus tax refunds. Losses from this scheme were estimated at more than $4 million.
Some of the defendants were also charged with cheating individuals throughout the country by soliciting
money for fake lotteries or phony investment schemes.
15:19 03-29-01 |
