The former head of a major New York City charity is facing criminal charges for allegedly stealing more than $5 million dollars from the group, and turning it into illegal campaign contributions.
William Rapfogel was charged with grand larceny, money laundering, criminal tax fraud, and conspiracy. Attorney General Eric Schneiderman said Rapfogel stole from the Metropolitan Council on Jewish Poverty, an organization he led for 21 years. The charity fired Rapfogel in August.
Rapfogel is accused of bilking the Met Council of more than $5 million in bloated insurance costs. Prosecutors said he then directed the insurance company, Century Coverage, to steer the money to political groups and candidates.
Schneiderman also said Rapfogel pocketed $1 million for himself and used about $27,000 of the charity's money to pay a contractor doing work at his home.
The case could have implications for Assembly Speaker Sheldon Silver. New York Daily News Albany Bureau Chief Ken Lovett said Silver and Rapfogel are close.
"They first met when Silver coached Rapfogel in a community basketball league," he said. "They struck up a friendship there. They both own houses in the Catskills. They live a couple blocks apart in lower Manhattan," Lovett said.
Silver also hired Rapfogel's wife, Judy, to be his chief of staff.
Prosecutors have not accused Silver of any wrongdoing, but Lovett said the case could negatively affect him.
"Silver, like a lot of city and state lawmakers, has received money from this insurance group that Rapfogel was doing this scam with," he said. "[Silver] received money. Silver has directed a lot of member item money, millions, to Rapfogel's now former organization."
State campaign finance records show that Silver received $2,500 from Century Coverage in 2011.
Rapfogel entered no plea to the charges Tuesday.
To hear a full interview with Kenneth Lovett, click audio above.