N.Y. Exec With 'Sterling Reputation' Arrested for Defrauding Jewish Welfare Group

State attorney accuses William Rapfogel of stealing over $5 million in elaborate decades-long insurance scam at the expense of Jewish Metropolitan Council that he headed.

NEW YORK – William Rapfogel, who led New York’s premier Jewish anti-poverty non-profit before being fired in August has been charged with stealing more than $5 million over the course of two decades from his former employer.

Rapfogel, who surrendered for arrest Tuesday morning, has been charged by New York State Attorney General Eric Schneiderman of conspiring with executives at the Metropolitan Council on Jewish Poverty’s insurance agency to inflate the prices of policies bought by the non-profit and pocketing the kickbacks in cash.

The formal charges against Rapfogel include grand larceny, money laundering, criminal tax fraud and conspiracy, according to the complaint Schneiderman filed Tuesday.

Rapfogel — who continues to be widely lauded as perhaps the single person most responsible for helping needy Jewish New Yorkers — faces a jail sentence of up to 25 years, said Andrew Friedman, a spokesman for the attorney general, in an interview. The mandatory minimum sentence for the top charge alone, of felony grand larceny, is one to three years, he said.

In a separate statement, Schneiderman called Rapfogel “well-respected in government and his community,” and said that it is “sad and shocking” that he used Met Council as “his own personal piggy bank.” New York State Comptroller Thomas diNapoli said, in the statement, “the scale and duration of this scheme are breathtaking.” Rapfogel is expected to be released on bail, officials told Haaretz.

Rapfogel’s friends say they are still in shock about the firing and charges against someone who long ago developed a reputation for being indefatigably devoted to helping the poor. According to the criminal complaint, however, he has been less Robin Hood and more Meyer Lansky.

The complaint states that starting soon after he took the helm at the Metropolitan Coordinating Council on Jewish Poverty, in 1992, and right up through when he was fired, Rapfogel was given envelopes full of cash and checks “on a regular basis” to cover personal expenses - including a $27,000 bill from a contractor doing renovations earlier this year in Rapfogel’s apartment on the Lower East Side. The money came from Century Coverage Corp., an insurance agency in Valley Stream, N.Y., whose website touts the slogan “proactive risk management, creative solutions,” and which provided Met Council with property, car, health and umbrella policies.

According to the criminal complaint, Rapfogel and Century Coverage executives would decide on how much the policy costs would be inflated, and the insurance agency would issue false bills that the anti-poverty group would pay. The difference amounts to more than $5 million. The complaint states that Rapfogel personally pocketed $1 million and split the rest with his co-conspirators.

On one occasion, Rapfogel requested that a $100,000 cash payment be issued in check form so he could better conceal the true nature of the funds that he used to help a son buy a home, according to the complaint.

In August, investigators recovered some $420,000 in cash that Rapfogel had hidden in his apartment and upstate home. The complaint also says that Rapfogel directed insurance agency executives to contribute to the election campaigns of public officials involved in allocating government money to Met Council. Between the late 1990s and 2013, they contributed more than $120,000 to New York City candidates, the complaint states. State and federal candidates received tens of thousands of dollars in contributions.

The criminal complaint states that two unnamed co-conspirators — one a Met Council employee and the other an employee of Century — are the source of the allegations. Soon after his firing in August, Rapfogel issued a statement in which he wrote: “I deeply regret the mistakes I have made…I will do everything possible to make amends.”

Rapfogel had a sterling reputation among the heads of Jewish organizations until his firing, and was known for his devoted work towards helping the burgeoning number of Jewish poor. He built the Met Council into the powerhouse organization it has been, spending $120 million a year — much of it coming from government sources — aiding both the Jewish and non-Jewish poor through programs ranging from soup kitchens to career training. He has also been a fixture of Jewish life on the Lower East Side where he has lived since he and his wife Judy married and have raised three sons, who are now adults.

“I don’t know anyone who has helped more people than Willie Rapfogel,” said Jacob Goldman, a prominent Lower East Side real estate broker. While sitting outside his office being interviewed by Haaretz, Goldman briefly greeted Rapfogel’s wife Judy as she walked by with her arms full of grocery shopping bags. Judy Rapfogel works as chief of staff to New York State Assembly speaker Sheldon Silver. Said Goldman of Rapfogel, “I haven’t heard one person say anything negative about him, ever.”

As on most days for the past 40 years, Heshy Jacob on Monday prayed alongside Rapfogel at the historic Bialystoker Synagogue. “I saw he was very troubled. He’s totally broken, that I could tell,” said Jacob, who is chairman of the United Jewish Council of the East Side, and general manager of about 2,500 co-op apartments in the housing complexes that are part of the East River Housing Corporation.

“This is a very good man that did a lot of good throughout his entire life, did total chesed, and it appears," Jacob said, "he made a mistake. There are dozens of cases where he personally intervened, if I called him at 2:00 in the morning that someone in Brooklyn had their electricity turned off because they couldn’t pay the bill, by the following morning the money was raised to get the electricity back on again. I have great pity for him and his family, for the unfortunate situation.”

“I just pray that he has the strength to withstand it, because he’s done so much good for the entire Jewish community,” Jacob added. “I have to judge Willie by all the good that he did. I’m not going to judge him one sided, but in the totality of what he did in his life, and I hope God does too.”

The full text of the indictment: 
 

JTA