Lawyer pleads guilty in rabbi’s tax evasion scheme

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A San Diego attorney on Wednesday became the 11th person to admit in federal court to participating in a tax evasion scheme led by former Chabad of Poway Rabbi Yisroel Goldstein.

Elliot Adler, founding partner of Adler Law Group, a civil litigation law firm, pleaded guilty to one count of conspiracy, admitting to reducing his tax liability by approximately $500,000 from 2011 to 2107.

Adler, 45, was one of at least a dozen who sheltered part of their earnings in Goldstein’s “90/10” program. He would give money to Goldstein as a supposed donation for Chabad of Poway. But Goldstein pocketed 10% of the money instead. for himself and secretly returned 90% of it – much of it in gold, in this case.

The two used coded language derived from Jewish faith and culture to communicate the plot, referring to the money as “hallah” – a traditional bread – and their tax exchanges as wrapping “tefillin” – small wooden boxes. leather worn on the arms to contain the verses of the Torah – the plea agreement states.

For example, in December 2017, Goldstein deposited two checks from Adler, for $180,000 and $980,000, according to the plea agreement. A few days later, Goldstein wired about $1 million to a jeweler to buy 738 gold bars and gold coins.

A week later, Goldstein texted Adler asking when he could come for a tefillin wrap. “I’m ready for you,” the rabbi said. Goldstein delivered the gold the next day.

In his 2017 tax return, Adler said he donated more than $1 million to charity, fraudulently reducing his tax liability.

Adler returned the gold coins to Goldstein in October 2018 after Goldstein told him there was an IRS investigation and Goldstein needed help proving he was in possession of the gold , not Adler, the plea says.

Adler’s conduct was described in Goldstein’s own 2020 plea deal. Goldstein is serving a 14-month prison sentence.

In addition to the 11 guilty pleas, including Adler and Goldstein, two other participants accepted deferred prosecution agreements.

Adler is tentatively scheduled to be sentenced in July. He has already agreed to pay over $1 million in restitution to the IRS, an amount that includes back taxes, fraud penalties and interest.


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