Reposted from the This Week in Nonprofit Fraud Blog – July 28, 2014
An “Affinity” for Fraud
Photo courtesy of JTA.org
July 23, 2014: Yaakov Weingarten has been ordered to pay $360,000 to the United Jewish Appeal Federation of Jewish Philanthropies of New York and $162,000 in fines and penalties after pleading guilty to tax fraud in May. Between January 2009 and December 2011, Weingarten fraudulently raised funds from donors claiming he was collecting money for charitable purposes such as medical services and programs for terror victims and sick children, all to be used in Israel. He used 19 separate fictitious organizations to help perpetrate the fraud, including supposed synagogues. The remaining entities had Hebrew names to suggest legitimacy. Weingarten used the funds to pay for undisclosed personal expenses and did not report it as income; the $360,000 fine will be distributed to two legitimate Israeli charities, Scheneider Children’s Medical Center of Israel and United Hatzalah of Israel.
See more on this case at JTA – The Global Jewish News Source
- This is a tell-tale case of affinity fraud, as Weingarten used his ethnic and religious background and supposed affiliation with Israel as the main selling point of his “fundraising” to prey on ethnic communities and/or people sympathetic to the cause.
- Fraud is often committed by an individual taking advantage of or creating the illusion of trust. This case is no different as Weingarten portrayed himself as a trustworthy individual, in the Jewish community, in order to bilk donors out of hundreds of thousands of dollars.
Raffa Forensic Practice Tips:
- Affinity fraud preys on our human tendency to trust those who are like ourselves; we are never excused from our need to verify the trustworthiness of an individual just because we seem to have something in common.
- Does your organization perform due diligence on organizations or fundraisers before making charitable donations?
DON’T BE THE NEXT VICTIM OF FRAUD!
The Raffa Forensic Accounting Services Practice offers a wide variety of fraud prevention and detection services including Fraud Risk Assessments, Background and Workplace Investigations, Fraud and Internal Investigations, Transactional Due Diligence Investigations, Anti-Fraud Consulting and Training, and Computer Forensic Analysis.
For more information on the Raffa Forensic Accounting Services Practice please visit us at www.raffa.com/ProfessionalServices/Forensic/ and the Nonprofit Fraud Prevention Institute at www.raffa.com/Fraud.
You can also contact the following Raffa professionals with any questions or if your organization needs assistance in fraud prevention: