Met Council’s Rapfogel Facing Grand Larceny, Money Laundering Charges

Met Council’s Rapfogel Facing Grand Larceny, Money Laundering Charges

Ousted CEO hoarded cash from insurance overpayments, says AG.

William Rapfogel, the former head of one of the city’s most prominent social service agencies who was fired amid allegations of financial misconduct surrendered to the police on Tuesday, and will be face charges including grand larceny and money laundering, authorities said.

The scheme ensnaring the Metropolitan Council on Jewish Poverty may have spanned as long as two decades and involved millions of dollars, according to court papers. Rapfogel’s compensation at the organization was about $417,000.

An investigator working for the attorney general, in the criminal comlaint, says he recovered more than $400,000 in cash from Rapfogel that was kept in his homes on three dates in August.

Rapfogel, 58, long one of the city’s best known charity executives, was released from the First Precinct in Lower Manhattan after posting $100,000 in bail, according to a spokesman for state Attorney General Eric Schneiderman, who investgated the case. Rapfogel surrendered his passport after Judge Kevin McGrath ordered him not to leave the state.

“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,” announced Schneiderman in a statement.

Schneiderman annouced a long list of charges iincluding 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.

Schneiderman and state Comptroller Thomas DiNapoli have been jointly investigating accusations that as leader of the Met Council, Rapfogel inflated the agency’s insurance payments in collusion with a brokerage firm, Century Coverage.

The Times reported that an anonymous whistleblower alerted Met Council’s board to the scheme and the board. The Board on Aug. 12 anounced that it had hired a law firm to investigate and relayed the findings to the attorney general.

“We have been cooperating fully with the Attorney General’s office since we brought this matter to its attention in August, and we intend to continue to do so,” said a spokesman for Met Council, Steven Goldberg.

“We take the matters involved in this investigation, and the need to correct the issues of the past, very seriously. Under the new leadership of David Frankel, who will officially join Met Council on Monday, we will remain focused on what has been the core mission of Met Council for more than 40 years – providing essential services to thousands of New Yorkers in need.”

DiNapoli, the state comptroller, said “The scale and duration of this scheme are breathtaking. When individuals in the mission of helping others instead help themselves, it is particularly egregious. But eventually, fraud, no matter how cunning, unravels.”

A call to Rapfogel’s attorney, Paul Shechtman, was not answered on Tuesday afternoon, and a recording said his voicemail was too full to record messages.

The Daily News said Rapfogel’s case was adjourned for a Jan. 24 hearing, and quoted Shechtman as saying “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.”

According to Schneiderman, Rapfogel stole $5 million from the organization over a twenty year period, including keeping about $1 million for himself (and sharing the rest with co-conspirators).

In his role at Met Council, Rapfogel presided over its growth from a small beneficiary of UJA-Federation to a network of programs that serve 100,000 needy New Yorkers each year, utilizing strong connections with local elected officials — incuding Assembly Speaker Sheldon SIlver, whose chief of staff is Rapfogel’s wife, Judy — to win state and city grants. The organinzation’s mission has been not only to serve the needy but to break the stereotype that most Jews are wealthy.

The organization’s annual legislative breakfast, usually held immediately prior to the Celebrate Israel Parade, draws scores of elected officials and honors their work on behalf of the Jewish poor, and the annual Builder’s Lunch honors developers who consruct low-income housing.

At the time of his firing, Rapfogel admitted some wrongdoing, saying in a statement issued by his lawyer that “I deeply regret the mistakes I have made that led to my departure from the organization” after 21 years of service.

A spokeswoman for Silver said Tuesday the speaker would have no comment beyond the statement he issued in August, in which he said “I am stunned and deeply saddened by this news. While there is still much that we don’t know, we do know that the Metropolitan Council on Jewish Poverty has given tens of thousands of New Yorkers of all faiths and backgrounds lifesaving help over the past four decades.”

Met Council reportedly has about $15 million in acive state contracts from the state and receives millions more from New York City funding, as well as philanthropic funds.

Gabriela Geselowitz, Steve Lipman and Adam Dickter contributed to this report.

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