Israeli-born billionaire accused in $1B scheme must stay under house arrest

An Israeli-born businessman who allegedly embezzled about $1 billion from three banks in Moldova lost a bid to end his house arrest.

On Monday, a Moldovan court rejected the appeal by Ilan Shor, 28, who has been linked to the disappearance of nearly $1 billion, or 12 percent of Moldova’s GDP, late last year. His house arrest began last week.

Shor is heir to the Dufremol duty-free shop business and one of Moldova’s richest men.

Last November, $767 million disappeared from the three banks over three days. The New York-based corporate investigations firm Kroll concluded in a report that the damage, which is expected to reach $1 billion in total, was attributed to complex loan transactions that allowed Shor to store the money in offshore bank accounts, CNN Money reported.

Shor, who is married to Russian pop star Jasmin but likes to stay out of the public eye, was born in Tel Aviv and moved to Moldova as a toddler. His father, Miron Shor, started the Dufremol business, which opened Moldova’s first duty-free shops in 1994.

While Shor remains under house arrest, Moldova plans to conduct a secondary investigation, Politico reported.

The Kroll report acknowledges that detailed electronic data pertinent to the case were deleted.

The leaders of Israel and of the Jewish people are failing us

I write in sadness — deep sadness.

Almost 25 years ago, I read a one-line description of Jewish leadership that has haunted me ever since. The author, whose name I have repressed, wrote: “Only a confirmed anti-Semite could believe that the Jewish people have the leadership they deserve.”

I protested his statement then, but I am not sure I can disagree now.

The problems the State of Israel faces within the region are serious enough that even the best of leadership would struggle under the current situation.

One wonders how a weak leadership without moral standing or demonstrated competence can bear these burdens and how the citizens of Israel permit themselves such political leadership. Who could possibly imagine that in 2007:

  • The president of Israel stands accused of rape and did not resign.
  • The minister of finance of Israel was accused of embezzling funds from the March of the Living.
  • The foreign minister attempted to topple the prime minister, failed to do so but would not resign.
  • The minister of defense did not have knowledge or experience in military, political or governmental matters or good knowledge of the basic principles of using military force to achieve political goals.

Quoting the Winograd Commission: “The prime minister made up his mind hastily, despite the fact that no detailed military plan was submitted to him and without asking for one…. His decision was made without close study of the complex features of the Lebanon front and of the military, political and diplomatic options available to Israel.

“He made his decision without systematic consultation with others, especially outside the [Israel Defense Forces] IDF, despite not having experience in external political and military affairs. In addition, he did not adequately consider political and professional reservations presented to him before the fateful decisions of July 12th.”

And then there are the issues that affect domestic policy in Israel. The prime minister enjoys but 2 percent public support and still will not step aside. The defense minister ran on a platform of helping the poor and the underprivileged, yet once elected, did not attempt to act on those promises.

In the past, when there wasn’t enough food to go around, it was possible for the state to feed the entire Israeli population. Yet now, even with a budget surplus, the Jewish state is forcing hundreds of thousands of Jewish children [and Arab children] and elderly Holocaust survivors to go to bed hungry.

Any moral person reading these descriptions might immediately say, “Throw the bums out!” But who is there to replace those bums?

Opposition leaders made the decisions that led to the IDF’s ill-preparedness for the last war. They cut the budget, they chose to purchase the wrong military equipment, they mistrained the army and they were overly reliant on technological weapons to the exclusion of ground forces. They developed the economic policies that have led to hunger in Israel, a reality that the government of Israel — past and current — is too ashamed to recognize and too embarrassed to deal with.

One wonders why the Israelis can’t find leaders who are both competent and ethical. Yet, the Israeli leadership problems will not be solved by resignations. They are deeper. They go to the very quality of people who have stayed in the political arena and to the structure of parties and of government.
Closer to home, the situation of former World Jewish Congress (WJC) General Secretary Rabbi Israel Singer has gone from tragedy to farce.

For decades, Singer and WJC President Edgar Bronfman were a formidable team, pressing the issue of Jewish material interests with Swiss Banks, the German and other European governments and the general public. The power and prestige of Bronfman and the brilliance and bravado of Singer achieved significant results.

They embodied competence and wrapped themselves in the justice of their cause.

But after two years of investigations by the New York attorney general, which found financial irregularities, though it stopped short of labeling them criminal, the relationship between these two powerful men imploded. When the clash between the two partners went public, Singer was fired. When Bronfman resigned, the WJC posted a dossier on its Web site that brought the financial management of the organization into disrepute and will probably force the attorney general and the IRS to re-open inquiries.

Singer, who serves as president of the Conference on Jewish Material Claims Against the German Nation, in which he had no financial responsibilities but brilliantly and ably led the Claims Conference’s negotiations with the German government, refuses to step aside, even long enough to clear his name. He refuses to indicate whether he is a candidate for re-election when his term expires in July. And the Claims Conference board seems unwilling or unable to remove him or to ask him to step aside — even temporarily.

It is a sad ending to an extraordinarily effective and daring career that served the Jewish people exceedingly well. But Singer must surely step aside — if only to attempt to clear his name. If he does not, he must be pushed aside, in order to clear the name of the organization he heads.

The WJC’s major resources have always been its title, the prestige of its chairman, the skill of its staff and the location of its headquarters in New York. The WJC is in New York because of the way American Jews are perceived in Europe and throughout the world, where the organization’s claim to speak on behalf of the Jewish people is widely accepted and respected.

Yet there are just four candidates with enough money in their pockets poised to lead it. One is European, another South African and two are American billionaires. Put a European leader into the mix and the power of the organization is diminished. A white South African in the leadership shears away the cloak of justice. An Israeli at the helm would make the WJC indistinguishable from the Israeli government, whose standing in Europe is controversial at best. The American candidates must have the foreign policy experience and the drive to speak for the survivors the way Singer and Bronfman did.

To complicate matters further, there is widespread suspicion that former Israeli Prime Minister/Finance Minister Benjamin Netanyahu — who threatened to destroy the Claims Conference if Israel was not given control of Claims Conference negotiations and allocations — is operating through supporters who discredit the operation. At the same time, the Jewish Agency and others are attempting to force the Claims Conference to move to Jerusalem — yet their track record and the record of the Israeli government in support of survivors is problematic at best.

If the Israelis have their way, since funds are fungible, it would become difficult to distinguish the Claims Conference from the Israeli government, and European leaders and their citizens would be unlikely to consent to giving restitution funds to the Israelis.

Jews have been asking the perennial question about which president and presidential candidate is best for Israel. The truth is that I am less interested these days in what American presidents and presidential candidates will do to support Israel and much more interested in what Israelis will do for themselves to purge themselves from the corruption at the helm and instill ethics and values in their leadership and what American Jews will do to assist the process.

Still, the only thing more depressing than Jewish leadership these days is the leadership of the United States and that of Arab states and causes.

Michael Berenbaum is director of the Sigi Ziering Institute: Exploring the Ethical and Religious Implications of the Holocaust and a professor of theology (adjunct) at American Jewish University.

A Wealth of Embezzlers

A former bookkeeper at Temple Menorah in Redondo Beach turned herself in to police last week after reportedly admitting to having stolen nearly $100,000 from the Reform synagogue. Doina Stanescu, who has pleaded not guilty to the charges, allegedly embezzled the money by signing checks to herself.

The case exposes a danger for nonprofit organizations like synagogues, which may rely on volunteer lay leadership for much of their financial management and oversight.

Margy Feldman, Temple Menorah’s president, agreed that her synagogue runs on "a tremendous amount of trust in a very small office," but "my heart goes out to [Stanescu]." She said Stanescu had a gambling addiction and that the temple had contacted Beit T’Shuvah to request help for her. Feldman declined to discuss details of the embezzlement or the synagogue’s accounting oversight procedures. "Our synagogue needs to heal," she said, adding that the temple’s board of directors had met several times since the arrest to review accounting practices, "to see that this never happens again." Feldman also noted that other synagogues have been hit by similar crimes. "This is not an unusual circumstance," she said.

Embezzlement scandals at Jewish organizations have made numerous headlines in the past few years.

  • In March 2000, the fiscal administrator of the Los Angeles Hebrew Union College-Jewish Institute of Religion campus was arrested and charged with embezzling more than a million dollars over an eight-year period.

  • An FBI investigation in April 2000 found that the bookkeeper and the executive director of a Philadelphia-area synagogue had collaborated to steal $700,000 from that synagogue.

  • The investigation into Rabbi Baruch Lanner’s sexual misconduct as a leader of the Orthodox Union’s National Council of Synagogue Youth (NCSY) also uncovered numerous instances when Lanner had deposited donations to the NCSY into his personal bank accounts.

"Ideally, Jewish nonprofits and synagogues would be immune from this sort of behavior," said Judith Kranz, president of the North American Association of Synagogue Executives. "But we live in the real world, and so we set up these checks and balances to protect our synagogues from harm."

Because a great deal of money flows in and out of even a small synagogue, Kranz said, "In general, synagogues are set up like small businesses." Regular accounting principles should include two separate signatures required for each check with different people responsible for approving and writing checks.

Kranz also recommends having outside accountants come in to audit a synagogue’s books. Strict accounting practices and thorough oversight should help ensure that a dishonest person will be unable to steal. Kranz said her organization has never had to deal with a case of embezzlement and believes that when it happens at a Jewish organization or synagogue, it is "news, because it’s so rare."