NEWARK, N.J. (AP) — Federal prosecutors say New Jersey man who operated a supposed charitable organization instead ran it as an unchartered bank, accepting millions of dollars in deposits which he shielded from state or federal regulation.
Moshe Schwartz of Union City pleaded guilty Wednesday to operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return.
The 33-year-old Schwartz faces up to eight years in prison when he’s sentenced July 30.
Schwartz operated Gemach Shefa Chaim, purportedly to provide interest-free loans to needy members of the Sanz community in Union City. But Schwartz operated GSC as a bank and had more than 350 client accounts by July 2009.
Prosecutors say many GSC clients used their accounts to engage in suspicious and, at times, illegal activities.