Rabbi arrested in immigration fraud "mill" has checkered past

Reuters News
Posted: Oct 13, 2011 12:58 PM
Rabbi arrested in immigration fraud "mill" has checkered past

NEW YORK (Reuters) - In January 2004, Earl S. David's fate rested with a panel of judges from the appellate division of the New York State Supreme Court.

The 39-year-old attorney and rabbi had participated in a securities fraud, money laundering and bribery scheme in the early 1990s, but had agreed to testify for the prosecution, eventually helping the SEC and criminal authorities convict 39 defendants. Now the judges had to decide how long to bar him from practicing law.

"We are impressed by respondent's evident rehabilitation in the more than 10 years since the misconduct took place, and by his expressions of remorse for his wrongdoing," the panel wrote in handing down a 15-month suspension.

"During the intervening decade, respondent ... has maintained an unblemished disciplinary record."

What the panel did not know was that, far from learning from his mistakes, David was already heading up a far larger scheme, a massive immigration fraud "mill" that netted millions of dollars in profits and produced nearly 25,000 phony applications, according to federal prosecutors who unsealed an indictment against him Tuesday.

David, who authorities say fled to Canada in 2006 when he learned that his law firm was under investigation, was arrested Tuesday in Toronto on charges of immigration fraud, mail and wire fraud and money laundering. He is expected to face extradition proceedings.

While in Toronto, David became a regular member of Congregation Shaarei Tzedec, a small Orthodox temple that is one of the city's oldest, according to two congregants.

Paul Appleby, a former congregant who knew David, said the news of his arrest came as a shock to the temple's members.

"He's a friendly guy, he's an outgoing guy," Appleby said Wednesday. "He tries to help people. All of us who know him well are sure he is totally innocent of any charges."

Attempts to reach David's family members were unsuccessful.


In 2003, writing under the name Earl Avraham David, the rabbi authored "Code of the Heart," a treatise on Hebrew numerology that purported to reveal predictions of future events in the Bible based on a hidden code.

Federal prosecutors said David used a bank account in the name of his book to continue to profit from his fraudulent scheme even after he escaped to Canada.

According to prosecutors, David and his law firm submitted thousands of applications for legal status based on phony employment sponsorships and falsified documents, including fake pay stubs and tax returns.

As recently as Sunday, an avid Twitter user named Avraham David was posting messages under the account @codeoftheheart about numerology and current events.

"What we see about occupy wall street is mentioned in the prophecy that we read on yom kippur in that the rich must help the poor," he wrote that day in response to the Wall Street protests.

Later on Sunday, he tweeted, "Wealth and honor brings freedom as they share the same number of 614."

In addition to David, four other firm employees were charged Tuesday, along with seven other individuals who pretended to be employers willing to sponsor immigrant workers.

Fifteen other defendants were previously charged with various offenses related to the alleged scheme.

As part of his agreement with the SEC to settle the previous charges against him, David was barred from certain securities activities and ordered to pay back $10,000 along with a civil penalty of $5,000.

The case is U.S. v. David et al, U.S. District Court, Southern District of New York, No. 11-cr-424.

(Reporting by Joseph Ax; Editing by Jerry Norton)