Rothstein Chabad Insider Speaks Out Against Rabbi, Secrecy

He won't give his name, but as he sat across from me in a Fort Lauderdale eatery today, he was clearly stressed as he talked about the place of worship, the Downtown Jewish Center Chabad.

The chabad has been in the news because Ponzi schemer Scott Rothstein was not only a dedicated member but he helped build it with his ill-begotten money. Rothstein's name, which used to be on the building, has been removed, but the stain he has left on the congregation is far from removed, said the man.

He wouldn't give his name for fear of retaliation and losing, as he put it, "everything." He said he has become disillusioned with the DJCC, Rabbi Schneur Kaplan, and the entire chabad movement since Rothstein's billion-dollar Ponzi scheme imploded in late October.

But a slight smile crosses his face when he remembers first meeting Rothstein five or six years ago.

"He was driving a red Rolls-Royce, a Corniche II convertible with red leather interior," said the man. "It was a very nice car. And he had a great voice, a beautiful voice,

voice, a beautiful tenor. There was a joke that if the law career thing didn't pan out he could have a career as a singer. Who knew how funny that would become? Now he's singing like a canary."

Rothstein has indeed been cooperating with the government since his return from Morocco and is expected to join the Witness Protection Program after helping to make a case against an alleged Sicilian mobster. His former chabad, however, isn't being quite so talkative. Earlier this month, Rabbi Kaplan invoked the "clergy privilege" to try to thwart bankruptcy attorneys' attempts to determine if the chabad owes Rothstein creditors any clawback funds.

The insider says he has come to expect such secrecy from the chabad, which he calls, at its heart, a cult. The Chabad Lubavitch movement is too complicated to be described here, so I turn to our old friend Wikipedia for a link to help you understand it.  

"The whole Chabad Lubavitch movement is a cult," he said. "They encourage you to do more and then a little more and then a little more. If you did a dollar today, they ask that you do a dollar-ten tomorrow. They deify the rabbi, and the whole thing is geared toward a united world Jewry. Everything that goes well is the work of God. What goes bad is the work of Satan, so you must do more tzedakah, charity. It's a very secretive organization, and at its core, it exists as a fundraiser."

Bankruptcy investigators want all records the chabad has related to Rothstein and a list of all its donors since 2007. A court hearing on the chabad's attempt to block those requests is scheduled for April 7. A phone call I left with Rabbi Kaplan at the chabad was unreturned at the time this post was published.

"Chabad has a system of invisible banks; it has internal, in-house money lenders and internal deposits," said the source. "It's all based on trust and who you know. Say I'm going to give $100,000. I give the money, and then I get a little piece of paper with writing in Hebrew on it that has instructions. I get to Israel, I give them the piece of paper, and they give you the money. It's the same thing that's been going on in banks for centuries, only there is no oversight, no records, no taxes."

Interestingly, Kaplan's chabad isn't even recognized on, a website that is run "under the auspices of the Lubavitch World Headquarters." The insider says the reason for this is simple: Kaplan broke away from the sanctioned Lubavitch world and started his own renegade chabad in downtown without authorization.

The source said that the chabad system is all based on a territorial system and that the leader of the South Florida territory is Rabbi Abraham Korf, director of the Lubavitch Education Center in Miami Beach. Korf, he said, oversees all chabad operations from Palm Beach to the Florida Keys, and any new chabad must be approved by Korf, he said.

Kaplan came to South Florida in the late '90s and initially worked with Rabbi Moishe Meir Lipszyc of the Chabad Lubavitch of Fort Lauderdale. He said that Kaplan eventually broke from Lipszyc's chabad and took several of his followers with him, including former NFL player Alan "Schlomo" Veingrad and attorney Peter Itzler.

"He broke contact with the [chabad hierarchy] and set out on his own and did what he had to do," said the source. "In other words, he put his interests first. It was right around that time that he met Scott."

The insider says he wonders if the truth will ever come out about the Ponzi money Rothstein paid to Kaplan's chabad and likens the secrecy around the transactions to the Catholic Church scandals involving pedophilic priests.

"It's like dealing with the pope: Everything is a secret," said the source. "Why does the Catholic Church cover up child molestation? It's the same story here, only on this end, it's all about the money."

The insider said that in the end, the government has a duty to get to the bottom of everything when it comes to Rothstein, no matter how uncomfortable it might be. 

"If we are cleaning out the criminals, we have to get them all," he said. "You have to go all the way. You can't leave just a little bit of the cancer behind."

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Journalist Bob Norman has been raking the muck of South Florida for the past 25 years. His work has led to criminal cases against corrupt politicians, the ouster of bad judges from the bench, and has garnered dozens of state, regional, and national awards.
Contact: Bob Norman