Money Laundering At Yeshiva

MONEY LAUNDERING AT CITY'S OLDEST* YESHIVA
By KIRK JOHNSONFEB. 28, 1986

Since just after the turn of the century, when East Broadway was part of a vibrant Jewish community on the Lower East Side, the Mesivtha Tifereth Jerusalem yeshiva - the city's oldest -has been training scholars and rabbis in the intricate study of the Talmud.

In recent years, local, state and Federal investigators say, the school, through two senior officials, was also the center of a money-laundering scheme in which millions of dollars - some of it believed to be connected to organized crime - has flowed through the school's books.

In one 18-month period, the authorities say, $24 million was transferred in and out of the school's accounts. So far, 13 people have been found guilty of charges stemming from the continuing investigation.

Prosecutors say that the web of intrigue, most of which involved sales tax evasion by merchants in the Jewish community served by the yeshiva, was a product of diverse forces - from the desperation of two school officials who saw the 79-year-old institution teetering on the edge of bankruptcy in the late 1970's, to the local merchants who saw an opportunity to help themselves and the yeshiva at the same time. School Officials Cooperate

For the rabbi and the bookkeeper who allowed and encouraged the scheme - and were the only school officers who knew of its existence - personal profit was apparently not a motive, according to prosecutors.

* Oldest Yeshiva

** Oldest Yeshiva

*** Telshe and Panevėžio Yeshivas