Lawyer sentenced in tax-fraud scheme

San Diego man gets a year and a day in prison for his role in rabbi’s conspiracy.

SAN DIEGO — A San Diego lawyer, whose participation in the tax-fraud scheme hatched by former Chabad of Poway Rabbi Yisroel Goldstein allowed him to avoid paying $500,000 in taxes, was sentenced to a year and a day in federal prison.

Elliot Adler, who was the founding partner of the Adler Law Group in San Diego, was also ordered to pay a $20,000 fine and forfeit about $1 million in gold coins.

Adler is the 11th and final person charged in the longrunning case to be sentenced. Prosecutors said that between 2010 and 2018, Adler conspired with Goldstein to make bogus tax-exempt donations to Chabad in a scheme known as the “90/10” fraud.

People would give money to Goldstein that was ostensibly a donation to Chabad of Poway. In reality, Goldstein would take 10% of the donated money and return the balance along with a receipt on Chabad letterhead attesting to the tax-deductible donation. That allowed the individuals to claim the entire amount as a deduction on their taxes.

In Adler’s case, much of the kickback was made in gold coins, according to court records. In December 2017, Goldstein deposited two checks from Adler, for $180,000 and $980,000, according to Adler’s plea agreement. A few days later, Goldstein wired about $1 million to a jeweler to buy 738 gold ingots and gold coins. He then delivered the gold to Adler.

Adler declared on his tax returns for 2017 that he had made a $1-million charitable donation, which prosecutors said cut his tax liability by $447,000.

On Oct. 17, 2018, federal agents, who had learned of the scheme and had been investigating Goldstein since 2016, descended on his home and Chabad of Poway with search warrants. Soon after, Goldstein agreed to cooperate with investigators, but court records show he warned several others of the inquiry — including Adler.

Goldstein, in an effort to show he had the coins, asked Adler to return them. Adler went to Goldstein’s home on Oct. 19, 2018, and returned the coins.

Adler has agreed to pay more than $1 million in restitution to the Internal Revenue Service, an amount that includes back taxes, fraud penalties and interest.

In January, Goldstein, who pleaded guilty in July 2020 to tax and wire fraud charges, was sentenced to 14 months in prison.

Records with the State Bar of California, which regulates and disciplines lawyers in the state, show Adler has been suspended and is ineligible to practice law.