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Brooklyn charity implicated in scheme to steal more than $5M

New York State Attorney General Eric Schneiderman. Eagle file photo

NYS Attorney General’s Office

New York State Attorney General Eric T. Schneiderman announced Tuesday the arrest of William Rapfogel, former executive director and chief executive officer of the Metropolitan Council on Jewish Poverty (“Met Council”), a charity with offices in Midwood, Brooklyn, on felony charges of grand larceny, money laundering, criminal tax fraud and conspiracy, among others.

The AG’s complaint charges Rapfogel with conspiring with others to inflate the rate of insurance policies paid by Met Council while pocketing the difference in cost, amounting to more than $5 million stolen from the organization over roughly 20 years. Rapfogel received payments on a regular basis in envelopes of cash and in the form of checks for personal expenses, such as payment for a home contractor.

In the course of the investigation, which began in August following Rapfogel’s termination from Met Council, attorneys and investigators from the AG’s Office uncovered details of a scheme stretching back to the early 1990s.

Shortly after becoming executive director of Met Council in 1992, Rapfogel agreed to participate in an arrangement with other conspirators to inflate the cost of insurance policies obtained by Century for Met Council. For the duration of the scheme, the co-conspirators decided how much they would inflate the annual cost of insurance policies, with the inflated amount gradually increasing over time. In August, investigators recovered more than $400,000 in cash that was hidden in Rapfogel's homes, though the amount he was said to have received personally was more than $1 million.

“It’s always sad and shocking when we discover that someone used a charity as their own personal piggy bank — but even more so when that scheme involves someone well-respected in government and his community,” said Schneiderman.

In addition to taking cash kickbacks and checks for personal expenses – such as a payment of approximately $27,000 for a contractor working on his home – Rapfogel directed a co-conspirator at Century to make political donations on behalf of Met Council using money obtained from the inflation scheme. This individual regularly delivered checks for political donations to Rapfogel, who in turn gave the checks to various politicians and political organizations. During this scheme, various candidates for city, state and federal elective offices reported receiving tens of thousands of dollars in contributions from Century owners and employees.

 It is unclear exactly which political candidates have received monies from Rapfogel or if any are under investigation for campaign finance irregularities.

According the New York Daily News, however, four 2013 New York City mayoral candidates received contributions over the years from donors linked to Century Coverage, including City Council Speaker Christine Quinn ($25,000), Public Advocate Bill de Blasio ($1,690), Anthony Weiner ($4,900) and Bill Thompson ($15,350). Each candidate has contended that they were unaware of the scam.

“New York has the greatest nonprofit sector in the nation, but a case like this reminds us of the need to remain vigilant and strengthen our oversight of the industry,” Schneiderman noted.

 
--Charisma L. Miller, Esq., Brooklyn Daily Eagle contributing.

September 24, 2013 - 4:30pm


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