Los Angeles Man who Made ‘Donations’ to Jewish Group and Took Bogus Tax Deductions Sentenced to Prison

A Los Angeles man who made “donations” to several charitable organizations associated with a New York-based orthodox Jewish group—“donations” that were largely and secretly refunded—has been sentenced to six months in federal prison for attempting to avoid the payment of federal income taxes.

David Hager, 55, of the Hancock Park district of Los Angeles, who pleaded guilty in October to two counts of tax evasion, was sentenced yesterday afternoon by United States District Judge John F. Walter. Judge Walter also imposed a $30,000 fine and ordered Hager to perform 1,500 hours of community service once he is released from prison.

Hager is the first person to be sentenced after admitting that he fraudulently made “contributions” to charities associated with Spinka, a religious group within Orthodox Judaism based in Brooklyn, New York. Spinka Grand Rabbi Naftali Tzi Weisz, his assistant, several other defendants and five Spinka charities were indicted in late 2007 on a host of federal charges related to a wide-ranging conspiracy to defraud U.S. government agencies, to operate an underground money transfer system and to launder money through an Israeli bank (see: http://www.justice.gov/usao/cac/Pressroom/pr2007/164.html). Several defendants, including Weisz’s assistant, have pleaded guilty and are pending sentencing. Weisz, along with several individuals and the Spinka charities, are scheduled to go on trial on June 17.

Prosecutors have expanded their investigation to include more than 100 individuals who were contributors to Spinka organizations. Rejecting Hager’s plea for probation yesterday, Judge Walter said that the crime reflected Hager’s “arrogance” and that other contributors who do not come forward to authorities could face “significantly higher” sentences.

In a plea agreement filed in United States District Court in Los Angeles, Hager admitted that he filed federal tax returns for the years 2001 through 2006 that fraudulently claimed deductions for contributions to Spinka organizations. Hager acknowledged that he was reimbursed 90 cents for every dollar he “donated.” For those years, Hager owes the government $189,169 in back taxes, a figure that must be paid to the Internal Revenue Service within one month.

Hager also admited that he received cash from Spinka organizations in order to give kickbacks to other contributors. During 2005 and 2006, Hager received more than $300,000 in cash that he relayed to others, according to his plea agreement.

The investigation into the Spinka entities and the contributors is being conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.