NEW YORK (CBSNewYork/AP) – The politically connected former CEO of a prominent city charity admitted Wednesday he helped steal more than $9 million from the organization in an insurance scheme that authorities linked to campaign contributions.
William Rapfogel, 59, pleaded guilty to grand larceny, money laundering and other charges in a case that had rattled city and state political circles.
As WCBS 880’s Peter Haskell reported, Rapfogel pleaded guilty to four counts in Manhattan Supreme Court.
He formerly led the Metropolitan Council on Jewish Poverty for 20 years, which has long enjoyed close ties to politicians and has collected more than $26 million in state and city grants in recent years, and his wife was Assembly Speaker Sheldon Silver’s chief of staff.
Rapfogel became the executive director of the Met Council, as it is known, in 1992. He soon joined several conspirators in conniving to inflate the price of the organization’s insurance so they could pocket the overcharge, ultimately splitting more than $5 million over 20 years, Attorney General Eric Schneiderman said.
“I knowingly stole more than $1 million from the Metropolitan Council on Jewish policy as part of a scheme in which insurance premiums were inflated,” Rapfogel said in court.
He used $27,000 of that money to pay a contractor working on his home, and he had more than $400,000 in cash hidden in his home when investigators searched it in August 2013, Schneiderman said.
Rapfogel’s predecessor at the council, David Cohen, also pleaded guilty.
“These defendants abused positions of trust to steal millions of dollars from a taxpayer-funded charitable organization — one that is dedicated to serving New York City’s poor,” Schneiderman said in a statement. “Those who rip off taxpayers and charitable organizations will be prosecuted. While New York has the greatest nonprofit sector in the country, this case reminds us that we must vigilantly protect it.”
Rapfogel will be sentenced to 3 1/3 years to 10 years in state prison if he pays more than $3 million in restitution. He already has turned over nearly $1.5 million.
Rapfogel also directed a conspirator at an insurance company to use money reaped from the insurance scam to make donations to candidates and political groups on the Met Council’s behalf, the attorney general said.
Candidates for New York City, state and federal offices received campaign contributions of tens of thousands of dollars from the insurance company owners and employees, Schneiderman said. He didn’t identify the recipients.
After the allegations emerged, several New York City Democratic mayoral candidates decided to return contributions related to the insurance company, mostly received years ago. Among them was now-Mayor Bill de Blasio, whose campaign gave back $1,650 given in the 2009 election cycle.
No official made any connection between the donations and Silver’s office. Both Silver and wife have said they knew nothing about Rapfogel’s misdeeds.
Rapfogel was fired in August from his $340,000-a-year job, with the charity citing “financial irregularities” and “apparent misconduct.”
At the time, he said, “I deeply regret the mistakes I have made” but didn’t give specifics.
He was charged the next month, in a case investigated by Schneiderman and state Comptroller Thomas DiNapoli. Both are Democrats.
The Met Council’s work includes career counseling, handling donated clothes and installing safety equipment in the homes of the elderly. Its board includes some of New York’s most influential Jewish leaders, and its annual legislative breakfast is one of the major events of the political calendar in the city.
In 2012, Rapfogel supported Gov. Andrew Cuomo’s order limiting salaries at nonprofit social service agencies, saying there some “bad players” taking advantage of the system. Rapfogel was also a prominent appointment to Schneiderman’s Leadership Committee for Nonprofit Revitalization in 2011.
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