Ex-CEO Admits Stealing From Charity With Insurance Scam

The politically connected former CEO of a prominent New York City charity admitted on April 23 he helped steal more than $9 million from the organization in an insurance scheme that authorities linked to campaign contributions.

William Rapfogel pleaded guilty to grand larceny, money laundering and other charges in a case that had rattled city and state political circles.

He formerly led the Metropolitan Council on Jewish Poverty, which has long enjoyed close ties to politicians and has collected more than $26 million in state and city grants in recent years, and his wife is New York Assembly Speaker Sheldon Silver’s chief of staff.

Rapfogel became the executive director of the Met Council, as it is known, in 1992. He soon joined several conspirators in conniving to overcharge the charity for insurance so they could pocket the difference, ultimately splitting more than $9 million over 20 years, New York Attorney General Eric Schneiderman said.

Rapfogel, 59, is to be sentenced to 3 1/3 years to 10 years in state prison if he pays more than $3 million in restitution. He already has turned over nearly $1.5 million.

Rapfogel’s admission came after Joseph Ross, owner of Century Coverage of Valley Stream, N.Y., pleaded guilty in the scheme in December, and former Met Council executive director David Cohen did so earlier on April 23.

Rapfogel and Cohen also directed Ross to use money reaped from the insurance scam to make donations to candidates Rapfogel believed could help the Met Council, the attorney general said.

Candidates for New York City, state and federal offices received campaign contributions of tens of thousands of dollars from the insurance agency owners and employees, Schneiderman has said. His office declined to identify the recipients; none has been accused of wrongdoing.

After the allegations emerged, several New York City Democratic mayoral candidates decided to return contributions related to the insurance agency, mostly received years ago. Among them was now-Mayor Bill de Blasio, whose campaign gave back $1,650 given in the 2009 election cycle.

No official made any connection between the donations and Silver’s office. Both Silver and Rapfogel’s wife, Judy, have said they knew nothing about Rapfogel’s misdeeds.

Rapfogel was fired in August from his $340,000-a-year job, with the charity citing “financial irregularities” and “apparent misconduct.”