Security News: San Diego Attorney Admits to Conspiring to Commit $500,000 of Tax Fraud with Former Chabad of Poway Rabbi Goldstein

Source: United States Department of Justice News

Assistant U. S. Attorneys Valerie Chu (619) 546-6750 and Michelle L. Wasserman (619) 546-8431

NEWS RELEASE SUMMARY – April 13, 2022

SAN DIEGO – Elliot Adler, an attorney and founding partner of a boutique San Diego law firm, pleaded guilty in federal court today to conspiring with former Chabad of Poway Rabbi Yisroel Goldstein to commit tax fraud.

According to his plea agreement, Adler admitted that beginning at least as early as 2010 and continuing through October 2018, he participated in a so-called “90/10” tax scheme with Rabbi Goldstein. Specifically, Adler gave money to Rabbi Goldstein that purported to be a donation to Chabad of Poway. Goldstein then secretly funneled ninety percent of the funds back to Adler, keeping ten percent of the funds as his fee. None of the donated funds was actually given to the Chabad as a charitable donation.

Adler then falsely claimed that the fraudulent donations were tax-deductible on his tax returns, allowing him to reduce his personal income tax liability by approximately $500,000 (cumulatively) for tax years 2011 through 2017. 

To accomplish the scheme, Adler and Goldstein communicated using coded language. Goldstein would refer to cash as “challah,” the source of the cash as “the baker,” and would invite co-conspirators to “wrap tefillin” when he proposed meeting to receive checks or deliver cash.  For example, on Thursday, January 7, 2016, Goldstein texted Adler, “Good morning I got the challah[.] What time?”  That same day, Adler replied via text message, “Monday morning 8am at shul or today before 12pm if you can come to my office.”  Goldstein then replied, “Monday @8 is fine.”  On Monday, January 11, 2016, Goldstein deposited a check from Adler for $30,000 payable to Chabad of Poway. 

On or about December 29, 2017, Goldstein deposited two sequentially numbered checks from Adler, one for $180,000 and the other for $980,000.  On Friday, January 5, 2018, Goldstein sent Adler a coded text message proposing that they “get together and wrap teffilin.” A few days later, on January 10, 2018, Goldstein wired approximately $1million to a wholesale and retail jeweler to purchase 246 Suisse Fortuna 1 oz. rectangular gold ingots, 246 Canadian Maple Leaf 1 oz. gold coins, and 246 American Eagle 1 oz. gold coins.  On January 17, 2018, Goldstein sent another coded message to Adler asking him, “[w]hen can you come [i]n for a teffilin wrap?  I’m ready for you.” Goldstein delivered the gold to Adler the next day.  Adler nonetheless claimed on his 2017 tax returns that he had donated over $1 million to charity, fraudulently reducing his 2017 tax liability by approximately $447,000. 

Adler and Goldstein took additional steps to conceal their scheme from authorities. On or about October 18, 2018, Goldstein told Adler that he was under investigation by the IRS and that he had been the subject of an undercover operation relating to tax evasion. Goldstein asked for Adler’s help to prove, falsely, that Goldstein, and not Adler, was in possession of the gold coins purchased with Adler’s purported donation.  In the early hours of October 19, 2018, Adler arrived at Goldstein’s residence and returned the gold coins. 

In July 2020, Rabbi Goldstein pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million-dollar tax-evasion scheme and other financial deceptions involving theft of public money.  Rabbi Goldstein’s plea agreement outlined the fraud scheme with Adler.

Adler is the eleventh individual to plead guilty to crimes discovered in this investigation. Two additional individuals agreed to deferred prosecution agreements as a result of the investigation. 

“Elliot Adler conspired to commit a $500,000 tax fraud through phony religious donations,” said U.S. Attorney Randy S. Grossman. “Tax fraud is a serious crime that directly impacts our communities, and the U.S. Attorney’s Office is committed to working with the IRS, FBI and our other law enforcement partners to bring those responsible to justice.” Grossman thanked the prosecution team and agents for their hard work on this case.

“This defendant was part of an elaborate, years-long financial scheme to fraudulently claim charitable contributions in an effort to avoid paying taxes,” said FBI Special Agent in Charge Stacey Moy. “The FBI and our federal partners will continue to vigorously pursue those who abuse tax laws for their own financial gain – which also diminishes the public’s trust in charitable giving and hurts the organizations who rely on such donations.”  

“For years, Mr. Adler shirked his duty to pay his fair share and then he doubled-down in a failed attempt to cover up his million-dollar tax fraud with Rabbi Goldstein,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “Tax revenue funds our critical infrastructure, our national defense and pays for social programs like health care, education and social security. A one percent increase or decrease in tax compliance equates to approximately $35 billion in tax revenue used to serve the American public. IRS Criminal Investigation is committed to rooting out tax schemes and working with our law enforcement partners to bring financial fraudsters to justice.”

Adler is next scheduled to appear at a sentencing hearing on July 11, 2022, before Judge Cynthia Ann Bashant.

SUMMARY OF CHARGES                        Case Number 22cr0821

Elliott Adler                                                   Age: 45                       San Diego, CA

Conspiracy to Commit Tax Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES                     

Yisroel Goldstein, Case Number 20CR1916-BAS             Age: 58            Poway

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Alexander Avergoon, Case Number 19CR2955-BAS       Age: 44            San Diego                  

Wire Fraud, in violation of Title 18, USC 1343

Maximum Penalty: Twenty years in prison

Aggravated Identity Theft, in violation of Title 18, USC 1028A

Maximum Penalty: Two years minimum consecutive term in prison

Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)

Maximum Penalty: Twenty years in prison

Bruce Baker, Case Number 20CR1912-BAS                     Age: 74            La Jolla

Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Bijan Moossazadeh, Case Number 20CR1893-BAS          Age: 63            San Diego

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Yousef Shemirani, Case Number 20CR1895-BAS            Age: 74            Poway

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Boris Shkoller, Case Number 20CR1913-BAS                  Age: 83            Del Mar

Filing a False Tax Return, in violation of Title 26, USC 7206(1)

Maximum Penalty: Three years in prison

Mendel Goldstein, Case Number 20CR2772-BAS             Age: 63            Brooklyn, NY

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Stuart Weinstock, Case Number 21CR0042-BAS             Age:    64            Escondido, CA

Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)

Maximum Penalty: Three years in prison

Jason Ellis, Case Number 21CR2200-BAS             Age: 42            Poway, CA

Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)

Maximum Penalty: Three years in prison

Yehuda Hadjadj, Case Number 22CR148-BAS    Age: 47           La Jolla, CA

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

Maximum Penalty: Five years in prison

Rotem Cooper, Case Number 20CR3968-BAS                  Age:    54            San Diego      

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

Igor Shtilkind, Case Number 20CR3955-BAS                   Age:    55            San Diego

Deferred Prosecution Agreement

Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371

INVESTIGATING AGENCIES

Federal Bureau of Investigation

Internal Revenue Service