Regulator examines eight linked charities amid £10m fake Viagra money laundering scam

Edward Cohen has been imprisoned for a total of more than nine years for offences including money laundering and supplying false information to the Charity Commission

Edward Cohen
Edward Cohen

This article has been amended - please see final paragraph.

The Charity Commission is investigating eight linked charities for alleged connection to a £10m money laundering scam involving fake erectile dysfunction and slimming pills.

At Southwark Crown Court last week the administrator of the charities, Edward Cohen, 67, of Paget Road, London, was given a seven and a half year prison sentence for money laundering and theft.

According to a statement from the commission today, Cohen was an administrator of Chabad UK, which was connected through shared trustees to the other six charities – Havenpoint Worldwide Limited, Mamosh Worldwide Limited, Or Simcha, Ozer Dalim Limited, Pikuach Nefesh Ltd and Worldwide Hatzala Ltd, plus the removed charity Havenpoint Limited.

The charities’ objects include humanitarian efforts, relief of poverty, education and the Jewish faith, according to their entries on the commission register.

According to the Metropolitan Police, nine companies in the Chabad UK group, including the seven registered charities, processed £10.3m into 14 bank accounts between March 2012 and September 2014.

A small proportion of these payments were confirmed as legitimate charitable donations, police said, but many of them came from overseas accounts and were connected to a large number of websites offering what turned out to be fake erectile dysfunction medication and slimming aids to customers in Austria, Germany, Switzerland and France.

The commission was notified of the police investigation in 2014 and found a pattern of regulatory concerns across the charities, including signs of fraud and mismanagement.

Cohen was found guilty last month of two charges of money laundering and one of supplying false information to the commission.

He was also found guilty of stealing £165,000 from the group of charities and companies. He was acquitted of an additional money laundering charge.

At an earlier hearing he was also found guilty of housing benefit fraud worth £233,000 and sentenced to a further two years and three months.

The commission opened a class statutory inquiry on 13 June 2014, looking into the use of the charities for a non-charitable purpose and as a conduit to launder the proceeds of crime, the misapplication of charitable funds, personal benefit to trustees in breach of trust, how the charities were set up and the supply of false or misleading information to the commission.

Amy Spiller, head of the investigations team at the Charity Commission, said: "This case has involved a dishonest abuse of charity and we welcome the sentence.

"Charities exist to do good and strengthen society, so abuse of position of this kind has no place in charity. It is right that the individual has been held to account for his actions through the conviction."

Chabad UK is in no way connected to Chabad Lubavitch UK, a separate registered charity. 

This story has been amended. It previously said Edward Cohen was a trustee of Chabad UK. He was in fact an administrator.

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