A Brooklyn native voluntarily returned to New York from Israel and pleaded guilty for his role in a drug-money laundering scandal involving members of the Bobover chasidic sect, two prominent Orthodox community leaders and a Colombian cartel.
In the unusual scenario, Michael Halberstam agreed to a plea bargain last month with the office of the U.S. Attorney’s Eastern District. His surrender contrasts with recent episodes (notably the Samuel Sheinbein murder case) in which the United States has attempted to extradite Americans from Israel.
Halberstam, who gave a 12th Avenue Borough Park address but according to his lawyer has lived in Israel for 27 years, waived an indictment and admitted to acting as a courier for the drug money. According to his account, he would pick up the tainted cash from a Manhattan safehouse operated by Manhattan real estate businessman Abraham Reiss and deliver it to Bobov official Rabbi Bernard Grunfeld, who laundered the money by making deposits into checking accounts of the Bobover yeshiva and its charitable agencies. The deposits would be for less than $10,000 to avoid federal detection.
The Jewish operation would then take 15 to 18 percent off the top for the laundering service.
There was no evidence, however, that Halberstam knew the money he delivered came from drugs, Assistant U.S. Attorney Lee Dunst said in court papers. Halberstam’s attorney, Ephraim Savitt, told Brooklyn federal Judge Jack Weinstein that his client transported about $400,000 in December 1995 and a $350,000 bundle in April 1996. Halberstam has worked for Abraham Reiss for five years, and manages Reiss’ real estate investments in Israel. He faces five years probation and a $60,000 fine. He apparently will not face charges in connection with the purchase by the Jewish faction of a light airplane on behalf of the drug dealers. Halberstam will be sentenced April 22.
Savitt said Halberstam, the father of eight, has lived in Israel with his Israeli wife but maintains an apartment in Brooklyn. His client voluntarily stepped forward after Reiss was indicted "to remove the pressure of any compulsion that would conflict with Mr. Reiss’ religious principles against incriminating a fellow Jew," according to court papers. Abraham Reiss and his brother Mahir were part of a 10-person drug-laundering conspiracy. All 10 pleaded guilty last summer in Brooklyn federal court. At those proceedings, a number of major ultra-Orthodox rabbis and community leaders begged Weinstein for leniency on behalf of the Reiss brothers.
Abraham Reiss, 49, was sentenced to five years probation, home detention for one year and a $1.5 million fine.
Mahir Reiss, 48, was sentenced to 27 months in prison and fined $6.3 million.Testimony on Mahir’s behalf included a lawyer for Israeli Prime Minister Benjamin Netanyahu, a member of Israel’s Neeman Commission and Rabbi Yaakov Perlow, also known as the Novominsker Rebbe, the newly appointed head of Agudath Israel of America and a longtime member its Council of Torah Sages.