San Diego dentist sentenced for tax evasion scheme with former Chabad of Poway Rabbi

 

Date: June 7, 2021

Contact: newsroom@ci.irs.gov

SAN DIEGO — Retired pediatric dentist Dr. Bruce Baker of San Diego was sentenced in federal court today to 15 months in custody for evading over $644,000 in taxes as part of a brazen, decade's long tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein.

During today's hearing, U.S. District Judge Cynthia Bashant noted that Dr. Baker is educated and sophisticated and committed the crime over a lengthy period of time. Judge Bashant agreed with the government's position that an individual who commits a crime over an extended period of time should not avoid custody based solely on the ground that the perpetrator is now too infirm to serve a custodial sentence. Judge Bashant cited the need for general deterrence, saying, "It's very important to send a message to the community that if you do something like this, you will spend some time in custody." The judge ordered Baker to report to prison on July 28.

Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization. Starting as far back as the mid 1990's, Dr. Baker engaged in various ploys with Rabbi Goldstein to cheat on his taxes. On most occasions, Dr. Baker purported to donate money to the Chabad of Poway, got a receipt for a charitable tax deduction, then received back ninety percent of his purported "donation" from Rabbi Goldstein. In this fashion, Dr. Baker paid for his child's private school tuition, his son's dental school and post-doctoral residency, and nearly three-quarters of a million dollars in renovations and supplies – all using funds he supposedly "donated" to the Chabad. Rabbi Goldstein also helped Baker move tens of thousands of dollars in undeclared income to bank accounts in Israel and Switzerland. Between 2004 and 2018, Dr. Baker gave at least $2.6 million in fraudulent donations to the Chabad, of which $2.4 million was funneled back to him.

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 tax evasion scheme with Baker.

Separately, Dr. Baker agreed with another San Diego religious leader to make a sham donation of an ancient Iranian Torah, supposedly valued at $1.2 million, to that leader's charity. Dr. Baker secured a tax deduction of $1.2 million – but in reality, the Torah did not actually exist and no $1.2 million donation was ever made.

"Dr. Baker took advantage of scheme after scheme to evade paying his fair share of taxes over many years," said Acting U.S. Attorney Randy S. Grossman. "Those who cheat the system by exploiting the tax-exempt status of non-profits and religious organizations will be held to account for their conduct." Grossman praised prosecutors Michelle Wasserman and Valerie Chu and FBI and IRS agents for their excellent work on this case.

"The magnitude of Mr. Baker's tax evasion, which he committed over decades, is appalling," said IRS Criminal Investigation, Special Agent in Charge Ryan L. Korner. "Our nation's tax system is designed to provide vital government services to all Americans, and by stealing from it, Mr. Baker not only broke the law, he enriched himself and his family members on the backs of honest taxpayers. The IRS remains vigilant in ferreting out these types of tax schemes and will continue to work with our law enforcement partners to ensure that tax cheats are punished."

"Dr. Bruce Baker and Rabbi Yisroel Goldstein manipulated our laws designed to reward genuine charitable giving for their own benefit. This case reinforces the FBI's commitment to investigating these kinds of frauds which not only take advantage of our system, but can undermine the public's confidence in our tax laws and charitable organizations around the United States," said FBI Special Agent in Charge Suzanne Turner. "Complex investigations require teamwork and this case is no different. Our partnership with the IRS and the United States Attorney's Office resulted in a significant punishment and what should be a warning to others who would consider committing similar crimes."

SUMMARY OF CHARGES
Bruce Baker, San Diego, CA
Conspiracy to Defraud the United States and File False Tax Returns, in violation of Title 18, U.S.C. §371
Maximum Penalty: Five years in prison

PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison

Alexander Avergoon, San Diego

Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison

Aggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prison

Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prison

Bijan Moossazadeh, San Diego

Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison

Yousef Shemirani, Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison

Boris Shkoller, Del Mar

Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison

Mendel Goldstein, Brooklyn, NY

Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison

Stuart Weinstock, Escondido

Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison

Rotem Cooper, San Diego

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

Igor Shtilkind, San Diego

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

INVESTIGATING AGENCIES

Internal Revenue Service
Federal Bureau of Investigation