San Diego Attorney Sentenced for $500,000 Tax Fraud with Former Chabad of Poway Rabbi Goldstein | USAO-SDCA

Valerie Chu (619) 546-6750 and Michelle L. Wasserman (619) 546-8431

NEWS RELEASE SUMMARY – August 19, 2022

SAN DIEGO – Elliot Adler, an attorney and founding partner of a boutique San Diego law firm, was sentenced in federal court today to one year and one day in custody for conspiring with former Chabad of Poway Rabbi Yisroel Goldstein to commit tax fraud. He was also ordered to pay a $20,000 fine.

Beginning at least as early as 2010 and continuing through October 2018, Adler 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 $1 million 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 was ordered to forfeit the gold coins as part of his sentence.

At today’s hearing, U.S. District Judge Cynthia Bashant also ordered Adler to forfeit the gold. A restitution hearing is set for October 24, 2022, at 10:30 a.m.

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 and final individual to be sentenced for crimes discovered in this investigation. Two additional individuals agreed to deferred prosecution agreements as a result of the investigation. 

“For several years, Elliot Adler defrauded the United States while giving the false appearance of making charitable donations,” said U.S. Attorney Randy S. Grossman. “This investigation and the resulting prosecutions should leave no doubt that the United States takes tax fraud seriously and those who perpetrate these schemes will be brought to justice.” Grossman thanked the prosecution team and the FBI and IRS for their excellent work on this case.

“For years, attorney Adler chose to ignore the laws and ethical rules of conduct he swore to uphold and conspired with others using sophisticated schemes to commit tax fraud,” said Special Agent in Charge Stacey Moy of the FBI San Diego Field Office. “Such schemes erode the public’s trust in the legal and charitable institutions within our community, but today’s sentencing ends his criminal career. Financial crimes have long been a top FBI investigative focus and we remain steadfast in our efforts, in coordination with our partners, to bringing such fraudsters to justice.”

“Mr. Adler, who is an educated and successful attorney, knowingly broke the law by repeatedly committing tax fraud for over seven years,” said Special Agent in Charge Tyler R. Hatcher of IRS Criminal Investigation’s Los Angeles Field Office. “Adler stole over half-a-million dollars from the United States, and our special agents are committed to bringing thieves like him to justice. Our tax and financial systems rely on Americans to pay their fair share in order to ensure that our infrastructure, our national security, and our education and benefits programs are funded. IRS Criminal Investigation is proud to work alongside the FBI and the US Attorney’s Office on this incredibly impactful investigation.”

SUMMARY OF CHARGES                        Case Number 22-CR-821-BAS

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

Sentenced to 14 months in custody

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

Wire Fraud, in violation of Title 18, USC 1343

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

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

Sentenced to 64 months in custody

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

Sentenced to 15 months in custody

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

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

Sentenced to three months in custody

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

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

Sentenced to two years’ Probation

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

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

Sentenced to one year Probation

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

Sentenced to eight months in custody

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

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

Sentenced to eight months in custody

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

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

Sentenced to six months of home confinement

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

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

Sentenced to three years’ Probation

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 – Criminal Investigations