As the co-owner of Scranton's historic Woolworth Mansion stood in a federal courtroom to hear his sentence on COVID-19 relief fraud charges Wednesday, two brothers and a son murmured prayers from benches.
Earlier, Yoel Weiss' brothers, Nachman and Boruch Weiss, and his son, Elisha Weiss, portrayed him as a man of stellar character.
All day long, U.S. District Judge Karoline Mehalchick listened to them and Weiss friends offer unabashed praise, even though he admitted to filing seven false applications at the height of the pandemic that netted him $858,000 in federal COVID-19 relief loans.
“I don’t think you can find one person who would say a bad thing about him,” Boruch Weiss said. “I don’t think there’s a person in Kingston, Wilkes-Barre or Scranton that my brother hasn’t affected in a positive way.”
Witness after witness — a dozen in all — called by attorney Joseph O’Brien, Weiss’ lawyer, said Weiss posed no danger to the community. O’Brien argued that and his willingness to repay the money made home confinement followed by probation the appropriate sentence.
Just that morning, Weiss’ cousin wired him $360,000 just that morning to pay off the balance of the loans he stole, O’Brien said.
Judge orders prison time
Mehalchick was unmoved. She acknowledged the Scranton Orthodox Jewish community’s vast respect for the 43-year-old co-owner of the historic Woolworth Mansion in Scranton, but, citing his still deeply confusing finances, she sent him to prison.
Mehalchick sentenced Weiss to 57 months, right in the middle of the 51 to 63 months called for under federal sentencing guidelines.
“You took advantage of a program that was meant to help people who were losing their jobs and businesses,” Mehalchick said. “You getting that loan took that money from other people.”
Weiss fakery earned COVID relief loans
A federal grand jury charged that Weiss pretended his companies employed people, sold goods and collected rent when he applied for federal aid meant to prop up companies struggling from the pandemic.
The companies had no business operations, according to a federal indictment. Four companies own five residential buildings, where the businesses supposedly operated, according to deeds.
Weiss, 43, a Scranton resident, spent the fraudulently collected loans buying other real estate, retail shopping, paying off credit cards and other personal expenses and loaning money to other people and businesses, according to the indicment.
The companies were 601 Clay LLC, 1123 Capouse LLC, 1127 Myrtle LLC, 922 Olive LLC, 140 Main LLC, Foote 19 LLC, Stone Close Inc. and Stein Sales LLC.
The first four own multi-apartment buildings. Other people owned 140 Main, Foote 19, Stone Close and Stein Sales, but Weiss operated and controlled each, according to the indictment. All were created well before the pandemic, according to the indictment and state records.
How the fraud worked
Weiss defrauded the U.S. Small Business Administration using the Economic Injury Disaster Loan program, set up under the Coronavirus Aid, Relief and Economic Security Act in March 2020, the month the virus began extensively shutting down the American economy.
To get a loan, applicants provided business information, including the number of employees, gross revenues and the cost of goods sold before the pandemic. Loan money could be used to pay mortgages or other fixed debts, employees and other everyday pre-pandemic bills.
Weiss applied for loans for all but Stein Sales between June 14 and July 8, 2020. He said:
- 601 Clay LLC had three employees, $300,000 in gross revenues and goods that cost $125,000.
- 1123 Capouse LLC had three employees, $350,000 in gross revenues, goods that cost $125,000 and lost rent of $210,000.
- 1127 Myrtle LLC had 11 employees, $325,229 in gross revenues, goods that cost $54,064 and lost rent of $175,000.
- 922 Olive LLC had 12 employees, $694,423 in gross revenues, goods that cost $425,663 and lost rent of $167,400.
- Stone Close Inc. had three employees, $450,000 in gross revenues, goods that cost $175,000 and lost rent of $200,000.
- 140 Main LLC had 12 employees, $318,674 in gross revenues, goods that cost $56,079 and lost rent of $165,400.
- Foote 19 LLC had 12 employees, $1,216,644 in gross revenues and goods that cost $603,000.
Three times, he applied for help in the name of the owners of the other companies, according to the indictment.
Using wire transfers, he shifted tens of thousands of dollars from one company to another or to pay credit card debt or other people.
The list of charges
He was indicted in November on seven counts of wire fraud, seven counts of false statements to the SBA, three counts of aggravated identify theft, 23 counts of unlawful monetary transactions and one count of witness tampering.
Weiss threatened a witness so she would not testify before a federal grand jury investigating him, according to the indictment.
In January, he pleaded guilty to single counts of wire fraud and unlawful monetary transactions.
The witness tampering charge was among those dropped, but related evidence was raised by the prosecution to seek a lengthened sentence.
Weiss threatened his wife
The threatened witness was his wife, Rivka Stein, the official owner of Stone Close and 140 Main, who has publicly accused him of sexually assaulting and beating her in several interviews over the last decade, including an April podcast.
Weiss has never been criminally charged with sexually abusing his wife, and Mehalchick said he has no criminal history before sentencing him.
Stein sat mostly silently throughout the eight-hour hearing, chatting occasionally with a victim advocate and a prosecutor, Assistant U.S. Attorney Luisa Honora Berti.
Reading from a pre-sentencing report, Mehalchick said Weiss threatened to take the couple’s children to another country if she testified against him, filed for divorce after she did and obtained credit cards in her name.
'The best father'
Again and again, Weiss’ character witnesses, including their son, Elisha, said they never saw him physically harm Stein.
“He’s the best father you could ask for,” Elisha Weiss, 16, testified. “Anything I want, he gets for me ... He’s a man who owns up to his mistakes.
The boy acknowledged his mother obtained a protection from abuse order that limited contact with his father, but said he never feared him and he isn’t a danger to the community.
“Quite the opposite,” Elisha Weiss said.
Always helpful
He and other witnesses spoke of Weiss’ willingness to help anyone, his hard-working, fix-broken-things nature, his devotion to his family and to Beth Shalom, the Scranton synagogue where Orthodox Jews worship.
That he committed fraud surprised them, they said.
“He always goes above and beyond (to help),” Boruch Weiss testified. “It’s not about making money. It’s always what he can do for somebody else ... He makes a difference in the community. If he had the opportunity, I’m sure he’d fill up this whole courtroom with supporters.”
Most of Weiss’ character witnesses said they attend Beth Shalom.
Focus on the wife
Several focused extensively on Stein, who did not testify because, Berti said, the couple’s marital background did not figure into the fraud case.
One witness, Rabbi Jacob Rubin, said he's known Stein since she was a foster child in the care of friends who lived in Catskills home near his.
“There is nothing there that’s true,” Rubin said. “We’ve gone through this with her for years.”
Weiss himself testified
O’Brien’s final witness was his client. Brooklyn born and raised and a Scranton resident since 2019, Weiss said he earned $8 million investing in the stock market. He eventually lost most of it, but at the time it enough that he could buy the Woolworth Mansion in March 2021 for $599,999 from artist Hunt Slonem.
He bought it because his wife used to walk by the building as a child and said he should buy it for her, he said. Married in July 2008, they separated for four years in 2012, he said, then reunited and moved to Scranton even after she first accused him of abuse and sought a divorce.
Weiss says wife lied
He accused his wife of fabricating the abuse.
“I’ve never laid a finger on her,” he said. “We don’t have any excessive punishments to any of our children.”
Despite the accusations, the couple has joint custody of the children, according to Weiss’ testimony.
Weiss admits fraud
On his actual crime, Weiss said he has employees and, in his mind, associated them with each corporation to justify the fraud. He “fabricated” all the numbers, he said.
“I just put in whatever to get these loans,” he testified. “It was COVID, but there was no excuse for me ... It was 100% wrong, can’t justify it.”
There’s “zero” chance he would do it again, he said.
“It cost me my marriage, it cost me my children,” he said. “It cost the court’s time, it cost the taxpayers’ time.”
Mehalchick said the couple's martial troubles would not factor in her decision.
Straight to jail
After sentencing, O’Brien asked the judge to delay Weiss’ imprisonment so he could arrange his business affairs and care for the couple’s four children.
Berti said Weiss had plenty of time to prepare, Stein could care for the kids and he should go to jail because he could flee.
Mehalchick ordered his immediate imprisonment.
As federal marshals handcuffed and led him out of the courtroom, Stein stood and stared without saying anything.
Elisha Weiss looked at his mother and stuck out his tongue.
