United States v. Meir R
2 RABBIS ACCUSED OF LAUNDERING NARCOTICS MONEY.(News/National/International)
Rocky Mountain News (Denver, CO) June 18, 1997
Byline: Larry Neumeister Associated Press
NEW YORK -- Two Orthodox rabbis laundered $1.75 million in drug profits through a yeshiva and synagogue for Colombian dealers, federal prosecutors said Tuesday.
Rabbis Mahir R, 47, and Bernard Grunfeld, 67, were released Tuesday on $750,000 bail each. Mahir lawyer, Susan Kellman, said the complaint ``is filled with a variety of gross distortions.''
The rabbis conspired with 10 other people to launder $1.75 million in profits from Colombian drug dealers, according to the complaint. They sifted cash through the bank accounts of Congregation Eitz Chaim and Bobover Yeshiva, both in Brooklyn, the complaint said.
The complaint alleges the rabbis authorized about 95 cash withdrawals and deposits in various bank accounts of amounts from $9,000 to $9,999 from September 1994 and February 1997. Cash transactions of more than $10,000 must be reported.
INDICTMENT TIES RABBIS TO DRUG LORDS
The Buffalo News (Buffalo, NY) June 18, 1997 | LARRY NEUMEISTER - Associated Press
Two Orthodox rabbis were indicted Tuesday on charges that Colombian drug lords enlisted them and 10 others to launder at least $750,000 in profits through a Brooklyn yeshiva and synagogue.
"Money launderers are the indispensable partners of major drug traffickers," said U.S. Attorney Zachary W. Carter. "The cynical act of using religious institutions to conceal drug proceeds is particularly reprehensible."
Rabbis Mahir R, 47, and Bernard Grunfeld, 67, were each released on $750,000 bond secured by property. Rabbi Mahir R secured his bond by committing his $3 million residence and adding the signature of a Manhattan businessman. His lawyer, Susan Kellman, said that the complaint "is filled with a variety of gross distortions." She then cut off questions from two dozen reporters. Rabbi Grunfeld's lawyer, Benjamin Rosenberg, declined to comment. A 109-page complaint -- signed by Howard Campbell, a special agent with the Drug Enforcement Administration -- alleges that the rabbis conspired with 10 other people to hide $750,000 in profits from Colombian drug dealers by sifting cash through the bank accounts of Congregation Eitz Chaim and Bobover Yeshiva, both of Borough Park, Brooklyn. Campbell said they even used some of the laundered money to buy a Beech Super King plane, the kind often used by drug traffickers to smuggle narcotics from Colombia to the United States. At one point, Rabbi Mahir R helped transfer $2.4 million from a Swiss bank account to pay for the plane, which was flown in November 1994 from St. Lucie County Airport in Florida to drug traffickers in Colombia, prosecutors said. Prosecutors said Rabbi Grunfeld is listed as president of the congregation and an officer of the yeshiva. They said he has access to bank accounts for both. Rabbi Grunfeld also was charged with manipulating bank accounts to avoid detection by federal investigators. Assistant U.S. Attorney Lee G. Dunst clarified late Tuesday that prosecutors were looking at an additional $1 million that went through bank accounts of various religious organizations in Borough Park but were not yet alleging links to drug dealers for that money. The charges came out of a 3-year-old probe by the DEA and the Internal Revenue Service into drug money laundering operations in Brooklyn, Manhattan and Long Island. The complaint alleges there were about 95 cash withdrawals and deposits authorized by the rabbis in various bank accounts of between $9,000 and $9,999 from September 1994 and February 1997. Cash transactions of more than $10,000 must be reported to the government. There also was more than $19 million deposited into banks controlled by the rabbis during a 10-month period ending in May 1996, the complaint said. The rabbis and another go-between took between 12 and 15 percent of the laundered money as payment, it alleged. An eight-count indictment handed up late Tuesday by a federal grand jury in Brooklyn contained various money laundering and conspiracy charges.
DRUG CHARGES ROCK JEWISH COMMUNITY.
The Cincinnati Post (Cincinnati, OH) June 18, 1997
NEW YORK -- Illegal drugs are virtually unheard of among the Bobover Hasidim, an Orthodox Jewish community in Brooklyn named for the Polish town where thousands of its followers were killed in World War II.
So it was all the more astonishing for residents to learn that two of their rabbis were indicted Tuesday on charges of conspiring to launder and hide $1.75 million in Colombian drug profits.
''People can understand many things, but when it's involving drugs, that's killing people,'' Dov Hikind, a Democratic Assemblyman who represents the largely Hasidic district, said in today's editions of the New York Times.
Rabbi Mahir R, 47, and Rabbi Bernard Grunfeld, 67, were released on $750,000 bond secured by property after being charged with federal crimes that carry sentences of up to 20 years in prison.
Ten other people were charged.
The rabbis are accused of laundering hundreds of thousands of dollars for drug lords through a synagogue and a yeshiva, a Jewish school.
Mahir R' lawyer, Susan Kellman, said her client will be exonerated. Grunfeld's lawyer declined to comment.
The Bobov-Colombian Connection: Rabbis of chasidic sect implicated in million-dollar drug money-laundering scheme.
The Jewish Week 06-20-1997
The Bobov-Colombian Connection: Rabbis of chasidic sect implicated in million-dollar drug money-laundering scheme; community reeling.
Rabbi Bernard "Beirish" Grunfeld sat solemnly on the wooden bench in Brooklyn Federal Court Monday afternoon looking like he was in a trance. His long white beard contrasted starkly against his long black chasidic coat, called a langer rekel in the Yiddish spoke on the cramped streets of his Borough Park neighborhood.
Missing from his head was the black beaver fur hat, the beeber hittel, commonly worn by members of the Bobover chasidim, the Borough Park-based sect of which he is a prominent member.
Nearby sat his wife, seeming on the verge of tears, accompanied by his two sons.
Rabbi Grunfeld, 64, president of the Bobover yeshiva and an executive director of Bobov's New York institutions, said nothing as federal prosecutors charged him and 11 others in a conspiracy to launder millions of dollars in illegal drug profits for Colombian drug dealers through the bank accounts of the yeshiva and synagogue of Bobov. The largest chasidic sect in Borough Park and the second largest in the state after Satmar, it has perhaps as many as 30,000 adherents.
The complaint charges that Rabbi Grunfeld and Rabbi Mahir R, 47, laundered tens of millions in drug money through the bank accounts of the Bobover Yeshiva, Congregation Eitz Chaim and Chaim Shel Shulem, believed to be a free-loan society and apparently located at the Bobover World Headquarters on 47th Street.
They are accused also of helping the drug dealers buy an airplane that is commonly used to transport illegal drugs.
The rabbis and other allegedly skimmed 15 percent to 18 percent of each transaction for themselves, federal officials said.
"Money launderers are indispensable partners of major drug traffic, and the cynical act of using religious institutions to conceal drug proceeds is particularly reprehensible," declared Zachary Carter, U.S. Attorney for the Eastern District of New York, in announcing the charges at the downtown Brooklyn courthouse Monday.
Rabbi Mahir R' lawyer, Susan Kellman, said: "It's clear the complaint is filled with a variety of gross distortions. In the end, my client will be vindicated."
Rabbis Grunfeld and Mahir R, as well as Mahir R' brother Abraham, who also was charged, face up to 20 years in prison and $1.5 million in fines. They each were released on a $750,000 bond. Rabbi Mahir R secured his bond in part by committing his $3 million residence.
Reaction to news of the arrests on the streets of Borough Park was a mix of shock and anger. One resident, asked by a reporter for comment, said testily, "Look elsewhere for a story."
Others, like Assemblyman Dov Hikind, who represents Borough Park, downplayed the fact that those arrested were rabbis, saying "Everyone in this community is a rabbi." Still others stressed that the matter should be seen in personal, not communal, terms. And still others surmised that Rabbi Grunfeld may not have been fully aware that the money he was allegedly begin asked to launder was connected to the drug trade.
But Assistant U.S. Attorney Lee Dunst said evidence indicated that "Bernard Grunfeld knew that this was the proceeds of drug trafficking or was deliberately closing his eyes, which under the legal standard makes him criminally culpable."
It is not the first time a chasidic sect has been linked with the billion-dollar Colombian drug cartels.
In 1994, Satmar Rabbi Abraham Low, married to the niece of the Satmar rebbe, Rabbi Moshe Teitelbaum, was convicted for conspiring to launder drug money - part of an international network that laundered up to $5 million a week. Other cases have involved a Brooklyn shtiebel and a Lower Manhattan yeshiva.
A 100-page federal complaint announced charges that the rabbis and other Orthodox Jews joined with five New York members of a Colombian drug gang to launder $1.75 million in drug profits.
The complaint said that Rabbi Grunfeld was brought into the operation by Rabbi Mahir R, president of Realex Capital on Park Avenue, and his brother, a real estate executive from the Upper West Side. Abraham R owns Weinreb Management, a major Manhattan-based real estate management company.
In the complaint, Rabbi Mahir R is referred to by other defendants as "The Rabbi," "Uncle" or "Barbas," Spanish for "beard," Abraham R was known also as "Roomie."
Also indicated Tuesday were Israel Knobloch, 24, of Brooklyn; Jack Pinski, 29; Roberto Buendia, 40; and Fabio Arana, 50, all of Medford, L.I.; Lisandro Montes De Oca, 29, of the Bronx; Juan Suarez, 28, of Seaford, L.I.; Francisco Gil, Estonio Rodriguez and Alvaro Duque. Knobloch, Pinski and Pinski and Duque are fugitives.
The indictments are the results of a three-year federal undercover operation that employed wiretaps and other devices, authorities said.
Federal officials said the alleged Bobov-Colombian connection worked like this:
Three middlemen - Pinski, Buendia and Arana - went from Buendia's Long Island home to Manhattan, where they would pick up the drug money from Colombian drug dealers. The three would bring the cash to a safe house, an apartment at 243 W. 75th St., to be counted.
Investigators said Abraham R would bring the money to Rabbi Gunfeld, who would cut checks to people named on a list faxed to the Mahir R brothers by Pinski and Buendia, according to Dunst, the assistant U.S. attorney prosecuting the case.
A key part of the scam, officials said, was the attempt to hide the bank transactions from federal authorities by keeping each check under $10,000 - the amount that triggers automatic review by federal banking officials.
The complaint charges that Rabbi Grunfeld and Knobloch created the structure to divide $1 million into 95 separate deposits to avoid federal scrutiny.
Federal officials said in one case, the bank accounts used in the scheme were in the name of Chaim Shel Shulem and held deposits of more than $19 million during a 10-month period when the laundering transactions occurred, between August 1995 and May 1996.
Chaim Shel Shulem is located in the same five-story Bobover building on 48th Street as Congregation Eitz Chaim and the Bobover yeshiva.
Dunst told The Jewish Week that while the investigation is still continuing, "There is currently no evidence that any of the [Bobover] institutions whose bank accounts were used derived any profit from the criminal activity."
Federal officials have said that drug traffickers generally like using Orthodox and chasidic institutions to launder their money because of certain advantages: Cash deposits usually do not create government suspicion because banks believe they are charitable donations, and community members often do business in cash, enabling them to move money around the world.
In return, authorities said, yeshivas barely able to meet their bills receive a percentage of the drug money, allowing them to continue to operate.
"They look the other way" in order to get drug dealers' fees that can pay their bills, a federal prosecutor told the Daily News several years ago. The official said that some in the Orthodox community even take the attitude that "so long as it does not injure our community, it does not matter if drugs are being sold."
While Bobov officials were tight-lipped this week, one community member who said he knows Rabbi Grunfeld described him as "the type of person that would do favors for anyone at any time."
The Bobov member, who requested anonymity, also described a financial organization in chaos, with no oversight.
He said the Bobover rebbe. Rabbi Shlomo Halberstam, should not be held accountable for the scandal because he has been ill and "is not on top of it."
Many chasidic experts say that the "rebbe" of the sect has the ultimate authority in the community, and little occurs without his approval.
Back at the courthouse Monday, none of the defendants would comment.
Asked how she felt, the traumatized Mrs. Grunfeld told a sympathetic reporter, "It's up to you to write something positive."