The leader of an Orthodox Jewish sect was arrested Wednesday after authorities unsealed a sweeping 37-count indictment alleging that he operated a decade-long tax fraud and money laundering scheme stretching from Israel through New York to downtown Los Angeles' jewelry district, authorities said.

Grand Rabbi Naftali Tzi Weisz, head of the Spinka religious group, and his executive assistant, Gabbai Moseh E. Zigelman, are accused of soliciting "tens of millions of dollars" in contributions to Spinka charities while secretly promising to refund up to 95% of contributors' donations, federal prosecutors said. The contributors then illegally claimed tax deductions on their bogus donations.

Weisz and Zigelman calculated in January that Zigelman alone had solicited nearly $9 million in 2006, with a $700,000 profit for Spinka after donors were repaid, according to the indictment.

Spinka Jews are members of the Hasidic group within Orthodox Judaism. The sect originated in Romania and has a large population in Israel, Europe and Brooklyn, N.Y., where Weisz and Zigelman reside.

The indictment unsealed Tuesday charges Weisz, 59, and Zigelman, 60, with conspiracy to defraud the IRS and to launder money. They also face 19 counts of mail fraud, 11 counts of international money laundering and one count of operating an illegal money-remitting business. Additionally, Zigelman is accused of helping to prepare fraudulent income tax returns.

The indictment alleges that beginning in 1996, the pair reimbursed contributors through several channels. One involved cash payments transferred through an underground network that included businesses in and around L.A.'s jewelry district.

The scheme also allowed donors to pay a money laundering fee in order to have access to funds through wire transfers that started at Spinka organizations and ended in secret accounts in an Israeli bank, the indictment alleges.

Six associates, four of whom were arrested Wednesday, were charged in connection with the scheme. Those arrested were identified as: Yaacov Zeivald, 43, of Valley Village; Yosef Nachum Naiman, 55, of Los Angeles; Alan Jay Friedman, 43, of Los Angeles; and Joseph Roth, 66, of Tel Aviv. Authorities are looking for Los Angeles diamond merchant Moshe Arie Lazar, 60, and Tel Aviv attorney Jacob Ivan Kantor, 71, both believed to be in Israel.

Five Brooklyn-based Spinka charities are also defendants in the alleged money laundering scheme: Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn and Mesivta Imrei Yosef Spinka. The charities are accused of making out false receipts for phony donations as well as receiving the money laundering fees, according to the indictment.

The FBI and IRS are continuing to investigate alleged crimes committed by contributors to the charities, authorities said.