Haredi Ponzi Scheme Operator Awaits Sentencing

UNIVERSITY CITY • The federal prosecutor read the details of the crime as defendant Joshua Gould stood nearby in a gray suit, agreeing to just about everything he was accused of.

Yes, he and colleagues squandered about $1.5 million from a retired couple. Yes, Gould, 32, stole an additional $3.5 million from two dozen brokerage clients, many of whom he knew through his father-in-law's insurance firm, while others were beneficiaries of his own family's trust fund that he controlled.

And yes, with his young wife in the courtroom, Gould agreed that he used part of the proceeds from scams to invest in The Sports Nook, True Hockey and Free Poker Express, businesses that he started, while also spending it on 'substantial" personal expenses at strip clubs across the river, where he said he entertained clients.

Gould ultimately pleaded guilty to wire and mail fraud. But he acknowledges that his behavior was particularly piercing.

An Orthodox Jew, Gould lives in a community sustained by constant prayer. His acceptance there arguably gave him greater access to both swindle people and, perhaps, in time, to be forgiven.

"The filth," said Daniel Lefton, a victim, after the April 29 hearing was over, ashamed that Gould wore a yarmulke, or skull cap. "He is not representative of the Orthodox community."

Lefton, too, wore a cap that often signifies ties to the Orthodox Jewish faith, whose followers go to great lengths in the modern world to honor God. They keep kosher diets and refrain from using automobiles between Friday and Saturday evenings in full observance of the Sabbath.

Most Orthodox Jews in the region live within walking distance of six synagogues in University City. Gould attended Agudas Israel on Delmar Boulevard, along with the Lefton family, which was swindled out of more than $327,000.

"Nobody expected this," said Harriet Lefton, a widow. "Even when they alerted us we didn't believe it. We all knew him."

Gould isn't the only example of someone accused of exploiting his faith community.

Last week, lawyer Martin T. Sigillito, 62, of Webster Groves, pleaded not guilty to charges that he helped run a Ponzi scheme that cost investors about $52.5 million. Prosecutors said Sigillito, a bishop of an American Anglican church that meets in a St. Louis-area mortuary, used religious and social connections to take advantage of vulnerable people.

Many Ponzi schemes involve victims from religious groups. Elderly members of Jehovah's Witnesses congregations nationwide were bilked out of $16 million after being promised high returns. In April, the former chief executive of WexTrust Capital was sentenced to more than 13 years in prision for a scheme that authorities say bilked some $255 million from investors, primarily from Orthodox Jews in Chicago.

"The problem in most of these cases is finding a deep pocket," said Alin Rosca, an attorney at Chapman and Associates in Cleveland, a firm investigating the Gould saga. "Schemes collapse because they run out of money."

When Gould speaks of his crimes, he describes the particular toll they have taken on the Orthodox Jewish community.

"A lot of the people affected, we helped build the community together," Gould said in an interview. "There was a huge level of sensitivity that goes beyond what I did — the criminal charge.

"The level of betrayal is far-reaching."

Few people who know Gould are willing to openly talk about him. They feel a mix of sorrow and embarrassment because he was one of their own, said Shaya Mintz, a rabbi at St. Louis Kollel, an association of Jewish scholars that had honored Gould for his contributions to help educate area Orthodox Jews.

"Synagogue is not like when you pay membership to do exercise at a fitness center," he said.

"Synagogue is a place of spiritual growth, and it's a family. We all feel shameful, that's why nobody wants to talk about it."

THE ENTREPRENEUR

The son of a Wisconsin probation and parole supervisor, Gould was reared in Milwaukee in an Orthodox Jewish household. He moved to Bloomington, Ind., to study business at Indiana University.

In 2002, he relocated to University City and soon started to attend Agudas Israel.

"I wanted to look for a wife, settle down and get back to my roots and the way I was brought up," he said about moving here.

Scott Tills, the former manager of a Farmers Insurance franchise in St. Louis County, said he didn't hire people straight out of college, but he made an exception for Gould, who is a few classes short of graduating.

"He was an entrepreneurial thinker, a little too entrepreneurial, I guess," said Tills, shocked to find out about the news.

By 2004, he landed at Spetner Associates, an insurance firm on Delmar Boulevard. A year later, he married the boss's daughter, Temima Spetner, who survived a suicide attack while studying in Israel. More than 400 people attended their wedding at the Crown Plaza hotel in Clayton. They have three young children.

Gould jumped into community service, serving on the board of directors at Bais Yaakov High School of St. Louis, where he helped with fundraisers and negotiated tuition contracts at the private school. He helped start "Torah and Turf," a popular flag football and scripture program.

At an event called Jewish Unity Live 2008, Kollel recognized the Goulds for their "extraordinary devotion" to the community.

But by then, Joshua Gould's scam had begun.

DOUBLE LIFE

His downfall apparently started over a $1.5 million investment that Gould, David Rubin, the manager of Coral Mortgage Bankers Corp. branch offices in Chesterfield and University City, and at least one unnamed person embezzled from a retired couple.

Rubin, 47, who used part of the funds to pay his own salary and other businesses interests, also pleaded guilty in April to wire fraud.

Gould, who was supposed to invest some of the funds responsibly, used it for start-up costs for businesses in which he held interests, as well as for jewelry, car payments, renovation to his home on Amherst Avenue, credit cards, adult entertainment and fake interest payments to the investor, according to court records.

Gould also persuaded clients at his father-in-law's insurance firm to move their investment portfolios into his fold as an independent broker for Woodbury Financial Services, which included retirement accounts.

Soon he was forging signatures and making trades without their approval. He transferred proceeds to his own personal bank accounts and used some of the money to cover false interest payments to clients, even though their accounts had been liquidated.

He stole $3.5 million from two dozen clients, including his own family members, until someone questioned ambiguities in his account.

Woodbury fired Gould and reported him to regulators in 2010.

That same year the Kollel group honored Gould and his wife again, giving them the Young Leadership Award.

A photograph from the evening shows the Goulds with broad smiles.

Inside, however, the scam was tearing at Joshua Gould.

"I was living a double life, and about every decision I was making was an attempt to fix or correct what I was doing," he said. "With each opportunity for a decision came a poorer decision that further created the problem."

SHOWING RESPECT

In an apparent attempt to pay back part of the millions that was stolen and clear liens on his businesses, Gould got a job with Liberty Tax Service, waving on a street corner dressed as the Statue of Liberty.

Even then, he lasted only a few months at the tax preparation business before he was fired because of his indictment, said Al Watkins, his attorney.

"To the extent that he can help, even while he is incarcerated, he will do so," Watkins said.

Gould has cooperated with prosecutors and says he's trying to fulfill the obligations of Jewish faith to make restitution, though it's unclear how he'll be able to repay all of what was stolen. He has paid back about $40,000, Watkins said, while anonymous donors are paying mounting legal bills.

Rabbi Yosef Landa, chairman of St. Louis Rabbinical Council, said the Gould case illustrated that no one was immune to temptation.

"Being a human being who strives for a religious life does not mean that we are not subject to the personal challenges that every human being faces," he said. "When we fail, it's not the fault of religion, it's our fault. We are not angels. We are just human beings."

He said the greater the failing, the more compassion the person needed, but he said people should work hard to make sure such crimes didn't happen again.

"It's a good person gone awry, not a bad person," he said. "The person could always come back to that goodness, but nevertheless there are lessons to learn."

Gould faces a maximum penalty of 20 years in prison and a $250,000 fine for each of his two charges.

He waits in his home for a July 22 sentencing hearing, as members of the tightknit community walk up and down his street during Sabbath, pushing strollers, while some of the older children play under the brims of broad black hats.

Gould no longer attends the synagogue or the organizations that honored him. He rarely goes outside, other than to his lawyer's office. He is the neighbor of people from whom he stole.

So, he said, he has chosen to show respect for the victims by not showing his face.