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Rabbi in Dwek money laundering gets 12 months, one day

Photo Credit: Cliffview Pilot File Photo

YOU READ IT HERE FIRST: A federal judge today handed down a prison sentence of a year and a day to a Brooklyn rabbi who admitted his role in laundering money for Solomon Dwek, the crook-turned-government informant who helped authorities pull off New Jersey’s largest public-corruption bust ever.

Brooklyn-based Lavel Schwartz, 61, also must spend three years under federal supervision after his release.

Schwartz, who originally faced up to 10 years in prison and a $250,000 fine under federal sentencing guidelines, also agreed to forfeit approximately $90,000, which the government said represents his total fee ( CVP was first with news of his guilty plea: Rabbi caught in NJ corruption sting admits laundering money for Dwek ).

Schwartz admitted in May that he and his brother, Rabbi Mordchai Fish, agreed to launder and conceal $200,000 to $400,000 through a series of purported charities — also known as “gemachs” — that Fish controlled or had access to, in exchange for a 10% fee.

Dwek told him the money came from trafficking in counterfeit goods, Schwartz said.

Fish directed Dwek to make the checks payable to several gemachs, which were purportedly dedicated to providing charitable donations to needy individuals. These included Boyoner Gemilas Chesed, Beth Pinchas, CNE and Levovous.

Once he received the checks from Dwek, Fish passed them on to a co-conspirators who deposited them into bank accounts held in the names of the purported charities.

Fish controlled an underground money transfer network that brought the laundered money back to him and Dwek, the government said.

Schwartz said he helped count the money and encouraged Dwek to continue, in the hopes of collecting more. All told, he said, he participated in about 10 illegal transactions.

Schwartz and Fish were among 44 people charged amid a July 23, 2009 federal sweep, made possible by Dwek’s portrayal of a crooked developer — one he was suited to, given that he‘d been convicted of embezzling tens of millions of dollars.

Fish also pleaded guilty and was sentenced to nearly four years in prison in July.

“Few financial crimes offend our sensibilities like those that hide illegal activities behind the curtain of charity,” U.S. Attorney Paul J. Fishman said.

Fishman credited special agents of the FBI and IRS with making the case, handled by Assistant U.S. Attorney Mark McCarren of Fishman’s Special Prosecutions Division in Newark.

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