A.G. Schneiderman Announces Arrest Of Former Nonprofit Director For Involvement In Scheme To Steal More Than $5 Million
William Rapfogel, Former Executive Director And CEO Of Met Council, Inflated Insurance Premiums To Receive Cash Kickbacks And Disburse Political Donations
Over 20 Years, Rapfogel Conspired With Others To Steal, Launder The Proceeds Of The Theft, Cheat On His Taxes, And Falsify Documents, Reaping More Than $1 Million
NEW YORK - New York State Attorney General Eric T. Schneiderman today announced the arrest of William Rapfogel, former Executive Director and Chief Executive Officer of the Metropolitan Council on Jewish Poverty ("Met Council"), on felony charges of grand larceny, money laundering, criminal tax fraud, and conspiracy, among others. The Attorney General's complaint charges Rapfogel with conspiring with others to inflate the rate of insurance policies paid by Met Council while pocketing the difference in cost, amounting to more than $5 million stolen from the organization over roughly 20 years. Rapfogel received payments on a regular basis in envelopes of cash and in the form of checks for personal expenses, such as payment for a home contractor.
The investigation to date has revealed that Rapfogel received approximately $1 million himself and shared the remainder with his co-conspirators. Rapfogel also directed an owner of the insurance company - Century Coverage Corporation ("Century") - to make donations to politicians and political organizations in an effort to benefit Met Council. The criminal investigation into Rapfogel's scheme is being conducted in conjunction with New York State Comptroller Thomas P. DiNapoli as part of the Joint Task Force on Public Integrity.
"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," said Attorney General Schneiderman. "New York has the greatest nonprofit sector in the nation, but a case like this reminds us of the need to remain vigilant and strengthen our oversight of the industry. I want to thank both Comptroller DiNapoli for his continued partnership in our mission to root out public corruption and ensure taxpayer money is protected, and to the Met Council Board for bringing this activity to light and cooperating with our investigation to date."
"The scale and duration of this scheme are breathtaking," State Comptroller DiNapoli said. "When individuals in the mission of helping others instead help themselves, it is particularly egregious. But eventually, fraud, no matter how cunning, unravels. I want to commend Attorney General Schneiderman for ensuring that our Joint Task Force on Public Integrity creates a higher level of accountability in New York, as well as the Met Council for its cooperation."
Rapfogel is charged with Grand Larceny in the First Degree, Money Laundering in the First Degree, Money Laundering in the Second Degree, four counts of Criminal Tax Fraud in the Third Degree, Conspiracy in the Fourth Degree, five counts of Falsifying Business Records in the first Degree, and three counts of Offering a False Instrument for Filing in the First Degree.
In the course of the investigation, which began in August following Rapfogel's termination from Met Council, attorneys and investigators from the Attorney General's Office uncovered details of a scheme stretching back to the early 1990s. Shortly after becoming Executive Director of Met Council in 1992, Rapfogel agreed to participate in an arrangement with other conspirators to inflate the cost of insurance policies obtained by Century for Met Council. For the duration of the scheme, the co-conspirators decided how much they would inflate the annual cost of insurance policies, with the inflated amount gradually increasing over time. In August, investigators recovered more than $400,000 in cash that was hidden in Rapfogel's homes, though the amount he was said to have received personally was more than $1 million.
In addition to taking cash kickbacks and checks for personal expenses - such as a payment of approximately $27,000 for a contractor working on his home - Rapfogel directed a co-conspirator at Century to make political donations on behalf of Met Council using money obtained from the inflation scheme. This individual regularly delivered checks for political donations to Rapfogel, who in turn gave the checks to various politicians and political organizations. During this scheme, various candidates for New York City, New York State, and federal elective offices reported receiving tens of thousands of dollars in contributions from Century owners and employees.
Rapfogel was arrested this morning and arraigned in Manhattan Supreme Court. The investigation is ongoing, with the assistance of the New York City Department of Investigation and the New York State Department of Financial Services.
The Joint Task Force on Public Integrity is a cooperative effort between Attorney General Schneiderman's and Comptroller DiNapoli's offices to root out public corruption and maximize the resources of each office.