Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced that William Rapfogel, former executive director and chief executive officer of the Metropolitan Council on Jewish Poverty (Met Council), has been sentenced to 3 1/3 to 10 years in prison and ordered to pay $3 million in restitution to Met Council. The Attorney General’s investigation revealed that Rapfogel and his co-conspirators stole approximately $9 million from the taxpayer-funded nonprofit organization in a 20-year grand larceny and kickback scheme. Rapfogel personally stole $3 million and used the money to fund a lavish lifestyle.
...From 1993 to 2013, Rapfogel served as the head of Met Council, a New York State not-for-profit organization that provides the poor and elderly in the New York City area with social, economic, housing, food and emergency financial assistance. Met Council receives funding through New York State and New York City grants, legislative member items and contracts. Before Rapfogel, David Cohen was Met Council’s executive director, and after Rapfogel took over in 1993, Cohen served as a consultant to the nonprofit.
The conspiracy began in 1992, when Cohen devised a scheme with Joseph Ross of Century Coverage Corporation in which the company would submit inflated invoices for insurance coverage to the nonprofit. Met Council knowingly paid the inflated premiums, and then Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council's chief financial officer.
About six months after Rapfogel took over as executive director in 1993, he joined the conspiracy and began receiving kickbacks, either in envelopes of cash or through payments of personal expenses. Initially, Ross paid both Rapfogel and Cohen $20,000 to $30,000 annually, but the inflated amount on the insurance policies increased over time and so did the kickbacks, with Rapfogel ultimately receiving approximately $30,000 per month.
As part of the scheme, Rapfogel and Cohen also directed Ross to make political donations to various candidates for elected office from Century’s accounts or from straw donors, using money obtained from the inflated insurance payments. These campaign contributions were made to politicians who Rapfogel and Cohen believed could help Met Council. Rapfogel obtained the largest share of the kickbacks. In August 2013, investigators from the Attorney General’s Office recovered more than $400,000 in cash that was hidden in Rapfogel’s various homes.
Rapfogel, 59, pleaded guilty on April 23, 2014, to Grand Larceny in the First Degree (a class B felony), Money Laundering in the Second Degree (a class C felony), Criminal Tax Fraud in the Third Degree (a class D felony) and Offering a False Instrument for Filing in the First Degree (a class E felony). As part of his guilty plea, Rapfogel admitted that, while working with co-defendants David Cohen, Herb Friedman and Joseph Ross and with others, he stole from Met Council. Cohen, Friedman and Ross have all pleaded guilty in connection with the scheme.
His wife Judy, Assembly Speaker Sheldon Silver's Chief of Staff, was in court but made no comment, according to the Post.
Also, while William Rapfogel's co-defendent David Cohen asked their co-conspirator at insurer Century Coverage Corporation to make campaign contributions--using straw donors, in some cases--there's no explanation regarding specific acts.
As I wrote, it didn't make sense for College Point, NY resident Deborah Auletta, a Century employee, to give $175 to Delia Hunley-Adossa's longshot 2009 challenge to popular 35th District Council incumbent Letitia James, the leading Atlantic Yards opponent.
- Given that Forest City Ratner joined with the Met Council on an unsuccessful bid to redevelop the Seward Park Urban Renewal Area, the departure of Rapfogel cast a shadow on that bid and raised questions about Forest City's closeness to the organization.
- The Barclays Center chose to give the Met Council--and a music camp--profits from a 2/28/13 cantorial concert. I thought investigators might look into any ulterior motives, like buffing the developer's relationship with Silver as a prelude to that Seward Park bid, but apparently they didn't go that far.