Many Madoff victims expected to get all their money back

Victims of Bernard Madoff’s Ponzi scheme who invested $1.16 million or less with his firm will get all their money back, while others will have at least 61 percent of their money returned.

The news was revealed in court papers filed Tuesday by the Securities Investment Protection Corp. and cited by numerous media sources. The SIPC is the entity charged with returning money to the thousands of investors cheated in the Madoff scam, which collapsed in 2008. Many of the victims, like Madoff, were Jewish.

Nearly $11 billion of the stolen $17 billion has been returned to defrauded investors, “much more than anyone could have expected at the start of the case in 2008,” Stephen Harbeck, president and CEO of the SIPC, told ABC News on Tuesday.

According to ABC News, the largest source of money for repayment — some $7.2 billion — came from the widow of Jeffrey Picower, Madoff’s largest beneficiary and an alleged co-conspirator. Picower’s family foundation gave millions of dollars to Jewish and Israeli causes before the Madoff fraud forced it to close.

Irving Picard, the court-appointed trustee charged with recovering stolen funds and returning them to investors, announced on Tuesday that $1.2 billion more has been made available to repay investors, according to The Wall Street Journal. Picard is under the oversight of the SIPC.

Madoff, 77, is serving a 150-year prison sentence.

Senate unanimously approves E-2 visas for Israeli investors

The U.S. Senate unanimously approved a bill allowing Israeli investors to reside here to oversee their businesses in this country, which backers say will spur job creation and economic growth.

The bill had unanimously passed the U.S. House of Representatives on March 19 and now heads to President Obama for his signature.

The measure added Israel to the list of countries eligible for E-2 investor visas. Once signed into law by President Obama, as expected, the bill will put Israel on a list with more than 79 other countries whose citizens are eligible for the visas.

The visas are temporary documents available to foreign nationals who must be a national of a country with which the United States has a treaty. To qualify, the applicant must come to the U.S. to develop and direct the operations of a business in which he or she has invested, or is in the process of investing. The visas allow the investors and business leaders to reside in the United States to oversee their operations here.

Bilateral trade between the two countries hit $36.9 billion in 2011 and Israel is among the U.S.’s 10 largest export markets per capita.

Israel’s Poor Endure Tough Situation

Crumbs tumble down Yigal Alperson’s white beard as he eats his one guaranteed meal of the day at a crowded Jerusalem soup kitchen.

Tables spill over with immigrants, the elderly and single mothers, the predominant faces of Israel’s poor as the country’s economy is battered seemingly from every direction.

Three years of Palestinian violence have scared away investors, a worldwide economic downturn has devastated Israel’s once-thriving high-tech industry, factories are closing because of foreign competition and government cutbacks in welfare and social spending in response to a $6 billion deficit have taken their toll.

"My situation is difficult. We don’t have anything to eat," said Alperson, 66, an unemployed statistician, who supports his wife and five children on the $888 he receives each month from Israel’s national insurance system.

"This is security, you know," he said pointing to a plate piled high with steaming pasta, chicken cutlets and green beans at Meir Panim, a soup kitchen designed to look like a restaurant. "At least you know you’ll be eating today."

Israel’s unemployment rate is near 11 percent, almost 18 percent of families are living in poverty and the number of poverty-stricken children is on the rise. Israel now has one of the highest poverty rates in the developed world, according to 2002 statistics released recently by the National Insurance Institute.

A study of some 150,000 households, released this month by the JDC-Brookdale Institute, found that 8 percent were having severe difficulty buying enough food.

Meanwhile, Finance Minister Benjamin Netanyahu’s announcement last week that Israel’s recession was over sparked a storm of protest. Netanyahu swiftly backtracked from his remarks, saying instead that there were signs of economic recovery.

Exports are up and that’s a good sign, said Karnit Flug, who heads the Bank of Israel’s research department. The stock market also has risen in recent months. But it’s still too early to tell if Israel is headed toward better economic times anytime soon, Flug said.

There is a lot of uncertainty about the "security issue and prospects for improvement of the geopolitical situation," Flug said. "The ability of Israel to utilize its potential growth will depend on improvement in these areas."

The government has argued that the economy’s problems stem not only from the intifada but from more inherent problems in the structure of Israeli industry. To address these problems, Israel is trying to privatize many state-owned companies to boost competitiveness.

It has begun aggressively deporting foreign workers, whom government officials say take jobs away from Israelis and bring down wages for unskilled labor. The 1990s saw a dramatic increase in foreign workers in Israel. With 200,000 foreign workers, the Jewish State has one of the highest rates of foreign laborers in the world, experts say. Whether or not Israelis are interested in taking these unskilled jobs is unknown.

Another government project, reducing welfare support payments for the poor, is expected to increase poverty rates, the JDC-Brookdale study found. By setting a time limit for unemployment benefits, for example, the government hopes to encourage people to go back to work. But in Israel’s present economy, finding work is increasingly difficult.

The reforms "in the short term create a lot more poverty," said Jack Habib, a social economist who directs the JDC-Brookdale Institute. "More people are in need, but all the services they need are being cut back."

Rabbi Yechiel Eckstein is the president of the International Fellowship of Christians and Jews, which funds soup kitchens across the country, as well as a network of warehouses where the needy can receive free furniture and other household goods. The government is embarrassed by how its stringent new fiscal policies are affecting the country, Eckstein claims.

Such policies "have changed the face of Israel. Now the question is how to portray the public image of Israel," Eckstein said. "No one wants to portray it as a third-world nation, but to portray it as an idyllic place where everything is hunky-dory is morally and practically wrong."

The government is defending its policies, taking out ads in the national press saying the reforms are the only way to help the economy. Netanyahu says the cuts are necessary if Israel wants to have a modern economy. Critics say other solutions — such as raising taxes and investing massively in infrastructure — could ignite growth and, in turn, boost tax revenue.

According to recent surveys, however, most Israelis think the economy is suffering because of the intifada and won’t improve until the diplomatic impasse is resolved.

It’s not only unskilled workers who are having trouble finding work. As the economy slides, the highly educated also feel the pinch.

Leah Rizel, 34, has a master’s degree in human genetics and has worked for several years in genetics labs. For the past five months, however, she has been unable to find work. At this point, she said, "I’ll do anything for a job, because I have bills to pay and a child to raise."

It can be overwhelming "to see the amount of educated people, people with degrees, at the unemployment office," she said. "Getting an education these days does not mean you are going to get a job."

On Jerusalem’s Ben-Yehuda Street, the city’s once-bustling pedestrian shopping mall, the situation is grim. Repeated terror attacks have kept both tourists and locals away. Shop owners say they barely clear $220 a week.

"Zero. There is nothing," snapped Yosef Zakai, owner of a Judaica shop. "Except for someone calling from the United States for a Star of David, there is nothing. There is no work."

A few doors down, a man named Yosef said he wasn’t sure how much longer he could afford to run the women’s clothing store his parents opened in 1949. "This is the hardest period ever for the store," he said.

Across from his shop, he pointed out names etched on a memorial plaque — eight victims of a 2001 suicide bombing.

"Here one died," he said, pointing at a corner of stone pavement. "Here another, here another."

Yosef’s voice trailed off, and he headed back to his store — where, atypically, a customer was waiting.

Cunin Helps Save Shul Down Under

A Californian white knight has stepped in to solve a dispute between two warring Australian brothers-in-law.

Rabbi Boruch Shlomo Cunin, director of West Coast Chabad Lubavitch, recently organized a consortium of philanthropists to come up with a $700,000 down payment to purchase Sydney properties costing $9.5 million AUS ($6.59 million U.S.) to give back to Sydney’s chief Chabad rabbi, Pinchas Feldman. Cunin will hold the properties in trust, but will allow Feldman to continue on in his role as communal rabbi.

Feldman lost the properties, which included the Yeshiva Synagogue and day school campus, after New South Wales (NSW) Supreme Court ruled in July that he needed to pay Joseph Gutnick, his Melbourne-based brother-in-law, $15 million AUS ($10.4 million U.S.) by Aug. 11. Feldman failed to pay the money by the date, so Gutnick sold the properties to non-Jewish investors, essentially closing down the Yeshiva Synagogue and school.

According to Australian press reports, in 1994, Gutnick gave Sydney’s Yeshiva Synagogue $5 million AUS ($3.47 million U.S.) to protect it from bankruptcy. In exchange, Gutnick received the mortgages over the properties. In 2001, Gutnick demanded repayment of the monies, plus $3 million AUS ($2.08 million U.S.) in interest. Feldman, who is married to Gutnick’s older sister Peninah, refused, charging that the $5 million had been a donation, not a loan.

Gutnick sued and won. The NSW Supreme Court awarded him $15 million, which included repayment of the loan, plus interest and court costs.

The Gutnicks are Australia’s premier rabbinic family. Joseph’s father, Chaim, was rabbi for many years at Elwood Synagogue, one of the oldest shuls in Melbourne. Of Chaim’s six children, two are rabbis, two are married to rabbis, one works in community service and Joseph, a businessman, is a world-renowned philanthropist who has donated millions of dollars to Jewish causes.

Speaking to The Journal from Australia, Joseph Gutnick confirmed that a deposit had been put on the properties and that Cunin was a friend of his brother-in-law, but said he knew nothing about Cunin’s involvement in the affair beyond what he read in the papers. "As you can imagine, I am not on the best terms with my sister and brother-in-law," he said.

Rabbi Chaim Cunin, public relations director for West Coast Chabad Lubavitch and the son of Rabbi Boruch Shlomo Cunin, told The Journal that the money donated to Sydney did not come from telethon donations or California Chabad funds, but were private funds donated expressly for the Australian shul by families involved with Chabad on an international level.

"This was a rescue effort," Chaim Cunin said. "West Coast Chabad put [the deal] together with five families, but the great majority of the funds came from one family. At this point [the donors] have chosen to remain anonymous."

Cunin said that his father arranged for the money to be donated after he heard the properties were sold to non-Jewish developers, because he promised at the Lubavitcher Rebbe’s funeral in 1994 to never let a Chabad institution close down.

"My father would do — and has done — the same thing in California, and not just in California, but all over the world," Chaim Cunin said.

However, there are some members of the Sydney community who are not happy that the Feldman will continue to be the spiritual leader of the community charging that his 30-year leadership was characterized by gross financial mismanagement.

"The [day] school had debts in excess of $30 million [$20.8 million U.S.]," said Daniel Hayman, who had previously sat on the school board. "In a normal organization, the person [who was responsible] would step down. He has run the place into the ground, and he is still trying to take control back."

Hayman, who spoke to The Journal from Australia, is now the treasurer of the Tzemach Tzedek congregation, a breakaway shul he helped form after the Yeshiva Synagogue closed down. Hayman said that 80 percent of Yeshiva’s members had joined the new congregation, and it is unlikely that they will return to Feldman even though he has his buildings back.

"The vast majority of the congregation does not want to daven with him," Hayman said.

Hayman was upset that Cunin’s intervention reinstated Feldman as rabbi, saying that the buildings had been bought with communal funds and did not belong to Feldman.

"The only thing that the community is upset about is that the buildings should be returned to the community, and not to Rabbi Feldman," he said. "[Cunin’s] intention is for Rabbi Feldman to go back as rabbi, but the community doesn’t want him."

In a statement, Feldman said, "We look forward to soon being able to pray in the Yeshiva Synagogue once again and continue the services that Yeshiva has traditionally offered the community with a renewed vigor. Now more than ever we need the support, both financial and spiritual, of our local community to complete this process and to lay the foundation for an even brighter future for the community of Sydney."

Community Briefs

Iraqi Aliyah Recounted at KahalJoseph

When the smoke cleared in Baghdad, most Americans wanted to get out. But Manhattan resident Rachel Zelon opted to go in.

The Hebrew Immigrant Aid Society vice president, who was responsible for facilitating the rescue of a small group of Iraq’s remaining Jews and accompanying them to Israel, shared her experiences with members of Kahal Joseph Congregation on Aug. 5.

“I think that most of you have a much better understanding of the Iraqi Jewish community than I could ever have,” Zelon said to the audience, composed mostly of Iraqi Jews. “I just had the luck – good or bad – to have been there more recently than you. But the culture and the community and the way people live their lives in Iraq is something that you grew up with and something that I can’t possibly begin to understand.”

Zelon recounted her journey to Baghdad and her initial impressions of Iraq’s tiny Jewish community. “You could tell they were very fearful,” Zelon said of Baghdad’s 34 remaining Jews, whom she was able to locate only through contact information obtained from friends and relatives who had previously fled the city. “They would talk very openly about the fear of their neighbors. ‘The Muslims are coming to kill us. You can’t trust anyone,’ they would say. They are afraid to go out on the streets. Many people have not left their homes since the war.”

Despite the conditions, Zelon said that it was difficult to convince some of the Jews to leave Iraq. Many had family or businesses still in Baghdad. But others, like 79-year-old Salima Moshe, were relieved. Zelon said that when she told Moshe, whose relatives had previously fled to Israel, that she had come from Israel to bring her home, Moshe replied, “I thought everyone had forgotten about me.”

Zelon regrets that more of Baghdad’s Jews did not agree to accompany her to Israel, but that she was relieved that some decided to come. “Some people say to me, ‘You only got six people?'” Zelon said. “But those are six people whose lives will hopefully be better … hopefully we brought some dignity back to these few lives.” — Rachel Brand, Staff Writer

Waxman Rails Against Bush Administration

Rep. Henry Waxman (D-Los Angeles) tackled domestic issues during an Aug. 17 town hall meeting at Temple Beth Am that was sponsored by the Jewish Community Relations Committee (JCRC) as part of its Summer of Advocacy program and the synagogue.

“I’ve never been in office at a time when partisanship has meant so much,” Waxman said.

A staunch supporter of increasing medical/social services for citizens on a fixed income, Waxman blamed the Bush administration for upping the annual deficit to $500 billion, delving into the Medicare and Social Security surplus to pay for tax cuts and offering sweetheart deals to special interests.

“Many people in the Jewish community say, ‘If this administration supports Israel, I will support it,’ but, in my view, support for Israel transcends partisanship,” he said.

Waxman cited Torah-sponsored ideals such as tzedakah, social justice and tikkun olam as necessary, but increasingly scarce, commodities in political decision making.

“Policies now are favoring special interests,” Waxman said, “and ignoring interests benefiting the general public.”

During the question-and-answer session, Waxman had clear reactions to issues such as the California recall, which he finds appalling, and the implications of the Patriot Act, which he believes will encourage federal actions that may threaten our civil liberties. Waxman offered a less specific stance to the largely elderly crowd in attendance on the nexus of senior citizens’ rights and protecting the general public good, especially in relation to modifying driving laws following the July 16 Santa Monica farmers market tragedy. — Michael Aushenker, Staff Writer

Olmert: Invest in Israel Now

Ehud Olmert, deputy prime minister of Israel and minister of industry and trade, whose portfolio was also expanded Sunday to include communications, told local investors that now is the right time to invest in Israel. “The Israeli economy has great potential in different areas — more than high tech,” said Olmert last week during a breakfast at The Regency Club, sponsored by the Israeli Economic Mission and Southern California-Israel Chamber of Commerce. Olmert, the former mayor of Jerusalem, said that the government is working to make Israel more attractive to foreign investors by reducing (or eliminating) capital gains, taxes for foreign investors and by allowing products developed with Chief Scientist grants in Israel to be manufactured outside the country.

While he was in Los Angeles, Olmert also met with Stanley Gold, the head of Shamrock investments (which has invested for the last 15 years in Israeli companies like Tadiran and Pelephone). Gold committed to creating a new $120 million fund for inestment in the Israeli infrastructure. Olmert also met with Elliott Broidy, who is creating with Ron Lubash a $250 million fund for investment in Israel.

“I want investors to believe that Israel is the best place to invest in the world,” Olmert said at the breakfast, “that they can make more money in Israel than anyplace else in the world.” — Amy Klein, Managing Editor

Designer Fashions Hobby Into Business

When M.R.S President Molly Stern was growing up in Los
Angeles and attending Yeshiva University of Los Angeles High School, she felt
out of place. “I fancied myself a tomboy, if you will,” said the 30-year-old
designer of the M.R.S label. “And I never really felt comfortable with my body,
being a curvy, short woman in Los Angeles.”

In a city where most clothes are made to suit Los Angeles’
idea of the perfect female body type (tall and thin), Stern had difficulty
dressing herself in a way that reflected her artistic style and enhanced her
curvy body type.

“I have a high taste for fashion,” Stern said. “But I’m a
round, little, cute Jewish girl with size-C breasts and an hourglass figure,
and it is hard to find clothes that fit and are cute and comfortable, and that
don’t make you feel like, ‘Oh my God, I have to hold my stomach in,’ or ‘Oh my
God, my boobs are so big they are falling out of my shirt.'”

Stern, who is also a makeup artist catering to a celebrity
clientele, decided to take these sartorial matters into her own hands. When she
moved to New York in 1998, and found herself housebound during the harsh
winter, she decided that she needed a hobby.

“It was snowing, and I didn’t know what to do with that, so
I started to sew these sexy T-shirts,” she said. “They were sort of punk
inspired and had a deconstructionist feel to them — very sort of raw and
organic and were very conscious of flattering the body.”

After getting rave reviews about the T-shirts from her
friends, Stern took them to a downtown Manhattan store, where they were sold on
consignment. The T-shirts quickly sold out, and the store needed to order more.

In the meantime, Stern’s roommate, a celebrity fashion
stylist, asked Stern to make a shirt for actress Claire Danes, which Danes wore
in public. Stern also asked many of her actress makeup clients if they were
interested in garments that she made — and they were.

“Slowly but surely things like that started happening, which
gained a celebrity buzz,” said Stern, who called her label M.R.S, after her
initials (Molly Rebecca Stern). Today, M.R.S clothes are likely to be seen in
the fashion pages of Vogue and worn by celebrities such as Reese Witherspoon,
Milla Jovovich, Gisele Bundchen and Julianne Moore.

The philosophy behind the label is that women should feel
“modestly sexy,” an idea that Stern said was inspired by her religious

“I went to yeshiva myself, and I feel very aware of being
appropriate and being able to be in any sort of situation and feel good about
who I am and what I look like,” she said. “And that was always a struggle for
me within the community of being an artist and being more avant garde than the
average yeshiva girl, so I constantly had a struggle of feeling secure of this
is who I am and this is what I look like. [M.R.S clothes] were marrying the
concept of wanting to be accepted and appropriate and wanting to be unique and

In a an interview with Nylon magazine, Stern described her
personal clothing style as “lady and the tramp,” and, to some extent, M.R.S
clothes ascribe to the same philosophy. Simple T-shirt jerseys are gussied up
with ruched bustlines, held together with small strings of beads and sequins.
Many of the seams are hand-sewn, with overlocking stitches on the outside of
the garment, with asymmetrically cut hems, sleeves and necklines that create
the kind of disheveled look that would be welcomed at a Paris fashion show.

M.R.S had its debut fashion show last spring at Barneys New
York, and The New York Times called the clothes “a delight.” Stern found
herself inundated with orders — more than 1,000 pieces were ordered from the
collection — meaning that Stern and her small team of six workers in Brooklyn
had to work overtime to fill them.

Although M.R.S clothes are expensive (prices start at $60
for undershirts and go up to $5,000 for the couture dresses), there is such
high demand for them, that Stern is now looking for investors to help her
expand the company.

“I don’t know one woman who hasn’t at some point in her life
spat at herself in the mirror because she didn’t like the way she looks,” Stern
said. “My mission is to make that not happen anymore.”

“If you feel good in your clothes, you can do anything,” she
continued. “If we can inspire a nation to feel satisfied and exude their unique
sensuality or sexuality without it being obvious, then I think it is a really
exciting idea.”

M.R.S clothes are available at Barneys and Ron Herman
(formally Fred Segal) in Los Angeles.