Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman today announced that William Rapfogel, former executive director and chief executive officer of the Metropolitan Council on Jewish Poverty (Met Council), has been sentenced to 3 1/3 to 10 years in prison and ordered to pay $3 million in restitution to Met Council. The Attorney General’s investigation revealed that Rapfogel and his co-conspirators stole approximately $9 million from the taxpayer-funded nonprofit organization in a 20-year grand larceny and kickback scheme. Rapfogel personally stole $3 million and used the money to fund a lavish lifestyle.
“This sentence sends the message that there has to be one set of rules for everyone, no matter how rich or powerful, and that those who rip off the neediest New Yorkers will be prosecuted,” said Attorney General Schneiderman. “New York has the greatest nonprofit sector in the country, and this case reminds us that we must vigilantly protect it. I am committed to using every tool at my disposal to prevent people from abusing the public trust and cheating charities out of the funds they need to perform vital services.”
"The fraud that occurred over two decades by the people at the top of the Metropolitan Council on Jewish Poverty was shocking and very damaging to an organization that has literally helped countless people," New York State Comptroller Thomas P. DiNapoli said. "Those involved in this scam have been held accountable for their wrongdoing and this should serve as an example of what happens when individuals lose their way and become more focused on filling their own pockets than doing good works. Attorney General Schneiderman and his team deserve credit for aggressively and thoroughly pursuing this case. Through our Joint Task Force on Public Integrity, the Comptroller's office and the Attorney General's office will continue to fight corruption and find those individuals misusing the public's money."
From 1993 to 2013, Rapfogel served as the head of Met Council, a New York State not-for-profit organization that provides the poor and elderly in the New York City area with social, economic, housing, food and emergency financial assistance. Met Council receives funding through New York State and New York City grants, legislative member items and contracts. Before Rapfogel, David Cohen was Met Council’s executive director, and after Rapfogel took over in 1993, Cohen served as a consultant to the nonprofit.
The conspiracy began in 1992, when Cohen devised a scheme with Joseph Ross of Century Coverage Corporation in which the company would submit inflated invoices for insurance coverage to the nonprofit. Met Council knowingly paid the inflated premiums, and then Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council's chief financial officer.
About six months after Rapfogel took over as executive director in 1993, he joined the conspiracy and began receiving kickbacks, either in envelopes of cash or through payments of personal expenses. Initially, Ross paid both Rapfogel and Cohen $20,000 to $30,000 annually, but the inflated amount on the insurance policies increased over time and so did the kickbacks, with Rapfogel ultimately receiving approximately $30,000 per month.
As part of the scheme, Rapfogel and Cohen also directed Ross to make political donations to various candidates for elected office from Century’s accounts or from straw donors, using money obtained from the inflated insurance payments. These campaign contributions were made to politicians who Rapfogel and Cohen believed could help Met Council. Rapfogel obtained the largest share of the kickbacks. In August 2013, investigators from the Attorney General’s Office recovered more than $400,000 in cash that was hidden in Rapfogel’s various homes.
Rapfogel, 59, pleaded guilty on April 23, 2014, to Grand Larceny in the First Degree (a class B felony), Money Laundering in the Second Degree (a class C felony), Criminal Tax Fraud in the Third Degree (a class D felony) and Offering a False Instrument for Filing in the First Degree (a class E felony). As part of his guilty plea, Rapfogel admitted that, while working with co-defendants David Cohen, Herb Friedman and Joseph Ross and with others, he stole from Met Council. Cohen, Friedman and Ross have all pleaded guilty in connection with the scheme.
This conviction and sentence are the results of an ongoing investigation by the Attorney General’s Office in conjunction with New York State Comptroller DiNapoli, as part of the Joint Task Force on Public Integrity. Attorney General Schneiderman and Comptroller DiNapoli would like to thank the New York City Department of Investigation, the New York State Department of Financial Services and the New York State Department of Taxation and Finance for their assistance with the investigation.
Since taking office, Attorney General Schneiderman has prosecuted more than 40 nonprofit officials, politicians and government employees who abused the public trust. In recent months, the office announced the indictment of a New York City Councilmember for allegedly stealing $30,000 from a publicly funded charity; obtained the sentencing of a state employee for receiving free home improvement projects from a government contractor; and secured the guilty plea of a town supervisor who used government workers for his personal benefit.
Supervising Investigator Gerard Matheson from the Attorney General’s office is the lead investigator assigned to this case. The Investigations Bureau is led by Chief Investigator Dominick Zarella. Also assisting in the investigation are Supervising Auditor Edward J. Keegan, Associate Auditor Matthew Croghan, Supervising Analyst Paul Strocko of the Criminal Enforcement and Financial Crimes Bureau, and Legal Support Analyst KerryAnn Rodriguez of the Public Integrity Bureau.
This case is being prosecuted by Gary T. Fishman, Chief of the Criminal Enforcement and Financial Crimes Bureau, with Assistant Attorney General Jihee Suh of the Public Integrity Bureau. The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.