The Charity Commission has revealed a five-year old ongoing class inquiry into eight linked Jewish charities following the sentencing of a Charedi fraudster in London last week.
Edward Cohen, from Stamford Hill, was an administrator of Chabad UK and sold counterfeit erectile dysfunction and slimming pills worth more than £10.3 million through several bank accounts linked to the charity.
He was jailed for nine years and nine months at Southwark Crown Court for money laundering, theft of funds given for charitable purposes, and supplying false information to the Commission. In April, he was also found guilty of benefit fraud totalling £233,000.
Following the outcome of the court case, the charity watchdog said it could now reveal its class inquiry into Chabad UK, Havenpoint Worldwide, Mamosh Worldwide, Or Simcha, Ozer Dalim, Pikuach Nefesh, Worldwide Hatzala and Havenpoint.
The Metropolitan Police said the charities are based in Stamford Hill, linked to Chabad UK and had bank accounts controlled by Cohen. Investigators say he was routing payments for the unlicensed pills through them.
“Between March 2012 and September 2014, nine companies of the Chabad UK group, seven of which were registered charities, processed over £10.3 million, a very small proportion of which were legitimate charitable donations,” the Met said.
“During the same period, £8.6 million was transferred to Foreign Exchange accounts, and £1.6 million was transferred to a number of Money Service Bureaus. Thousands of pounds were also transferred to the defendants’ personal accounts.”
The class inquiry, which is close to completion, is examining whether the charities were used as a conduit to launder the proceeds of crime, whether they used charitable funds for criminal purpose, and whether the other trustees personally benefited.
On the outcome of Cohen’s trial, the Commission’s head of investigations Amy Spiller said: “This case has involved a dishonest abuse of charity and we welcome the sentence.”
She added: “Charities exist to do good and strengthen society, so abuse of position of this kind has no place in charity. It is right that the individual has been held to account for his actions through the conviction.”