NEW YORK -- A longtime Jewish community leader who headed one of the city's most influential social service organizations was charged Tuesday with looting the charity for two decades, stealing more than $5 million along with two confederates and pocketing $1 million himself.
State investigators of the scheme found more than $400,000 in cash squirreled away in homes of the community leader, William E. Rapfogel, 58, who was arraigned in criminal court on charges that included grand larceny, money laundering, conspiracy and criminal tax fraud.
Mr. Rapfogel's history at the organization, the Metropolitan New York Council on Jewish Poverty, where he was a figure of such prominence and respect that he was often referred to as the Prince of the Jews, was mired in fraud from almost the moment he took the helm in 1992, according to a criminal complaint filed in the case.
It was a history, according to the complaint, of cash kickbacks passed in envelopes and a slush fund that funneled campaign contributions to politicians who provided government grants to the nonprofit. The cash payments and contributions were skimmed from overpayments to Met Council's insurance broker, where one of the two people listed in the complaint as Mr. Rapfogel's co-conspirators worked.
After Mr. Rapfogel was fired in August on allegations of financial improprieties, he publicly acknowledged unspecified wrongdoing, issuing a statement saying, "I deeply regret the mistakes I have made that led to my departure."
The charges were based in some measure on investigators' interviews with Mr. Rapfogel and the two people referred to as co-conspirators, who were not identified in the complaint.
Mr. Rapfogel was arraigned in a brief proceeding before Judge Kevin McGrath in Criminal Court in Manhattan. He is expected to plead not guilty later at a court appearance. Judge McGrath released him on $100,000 bail.
The charges stem from an investigation by state Attorney General Eric T. Schneiderman and state Comptroller Thomas P. DiNapoli, into Mr. Rapfogel's stewardship of the social service organization, which first detected the improprieties and alerted New York authorities.
"It's always sad and shocking when we discover that someone used a charity as their own personal piggy bank -- but even more so when that scheme involves someone well respected in government and his community," Mr. Schneiderman said in a news release announcing the charges. Mr. DiNapoli said, "The scale and duration of this scheme are breathtaking."
The inquiry focused quickly on allegations that Mr. Rapfogel conspired with Met Council's insurance broker, Century Coverage Corp., to pad the agency's insurance payments by hundreds of thousands of dollars a year, according to a person briefed on the investigation.
As part of the scheme, officials said, Mr. Rapfogel directed a co-conspirator at Century to make the political donations on behalf of Met Council, using funds obtained from the padded payments. That co-conspirator delivered regular checks for the campaign contributions to Mr. Rapfogel, who in turn passed the checks on to various politicians and political organizations.
Over the course of the conspiracy, various candidates for New York City, New York state and federal elective offices received tens of thousands of dollars in contributions from Century owners and employees. None of the politicians has been accused of any impropriety.
Mr. Rapfogel surrendered early Tuesday morning at the First Precinct station house in Lower Manhattan, where he was fingerprinted and photographed. He was charged with one count each of first-degree grand larceny, first- and second-degree money laundering and fourth-degree conspiracy; four counts of third-degree criminal tax fraud; five counts of first-degree falsifying business records; and three first-degree counts of offering a false instrument for filing.
Outside the courtroom after the arraignment, Mr. Rapfogel's lawyer, Paul L. Shechtman, said: "Mr. Rapfogel hopes for a fair resolution of this case and will continue to make amends to Met Council. It's a sad day, but happily people who know Willie well are still in his corner."
Suspicions arose when Met Council officials received an anonymous letter indicating improprieties with insurance payments. The agency's board hired a law firm to conduct a close review of the organization's finances, said a person briefed on the review. When that review uncovered evidence indicating that the payments had been padded by about $200,000 a year, the information was turned over to the authorities, the person said.
Century Coverage's owner, Joseph Ross, has also been a focus of the state investigation, which is continuing. His lawyer, Benjamin Brafman, has said he was "aware of the investigation and intends to address the issues raised in a responsible fashion."
The respected, 40-year-old charity had expenditures of $112 million last year, money that went to help more than 100,000 people, most of them elderly. Among other things, it provided food assistance to 60,000 people, home-care services to 14,000 and affordable housing to 1,500.nation