|Bernie Madoff (The Guardian)|
This is an Orthodox rabbi who seemed to exemplify the highest of Jewish ethics. A brilliant man who was a role model of behavior in Torah and its ethics. He began a successful business. But unlike some successful business professionals he did not seem to cut any corners. He appeared to be loyal to highest of standards of Torah ethics. And remained Jewishly active in the city in which he lived - in the most obviously Orthodox way one could ever imagine. For which he was recognized by virtually all segments of Orthodoxy that knew him.
In that role he had even been asked to speak about Jewish ethics in business by people involved with Jewish outreach. Which he had graciously accepted and am told he spoke quite eloquently on.
Yesterday my heart was broken when I found out through a mutual acquaintance that this fellow was just another amoral crook. This is not just a rumor. I was directed to evidence of his wrongdoing.
This rabbi had borrowed massive amounts of money from wealthy religious investors and from people involved in Chinuch who thought they were investing money with the most honorable fellow their city. In short, he traded on his good name to get money from people that might otherwise never take that kind of risk.
Now much like Bernie Madoff, I’m sure that his original intent was never to cheat his investors. He probably believed that his acquisitions would turn a handsome profit. And that he would be able to pay off his loans and payout the promised monthly distributions to his smaller investors. But his investments turned south rather quickly. And his investors were left with nothing.
Ordinarily one might say that this was simply an investment gone bad through no fault of his own and that the people investing with him knew the risk. But there is unfortunately more to the story which showed a complete disregard for his investors. He cared only about enriching himself even while experiencing those losses - while stiffing everyone else.
Property he put up for collateral to his biggest investor (which was in the form of a loan that eventually came due) turned out to be under lien to investors from a previous deal.
In another loan with the same investor properties put up for collateral were sold before the loan came due. He pocketed the money.
In yet another project, he began distributing money to investors immediately and then suddenly stopped. He then sold the business without telling his investors and pocketed the proceeds. When it was discovered, he lied about his reasons for selling it - blaming others for what was clearly his own doing. And even before that business venture closed, he ‘borrowed’ money from it and never paid it back.
This was a sobering lessen for me. While I do realize that people are not always what they seem to be, I never thought I would be so easily fooled by someone that I knew relatively well.
True - he had lived a lifestyle that was consistent with his wealth, but he never seemed to flaunt it or go overboard. There is absolutely nothing wrong with enjoying one’s wealth. And his public persona was exemplary. Truly a role model for us all on how a religious Jew should behave if they are wealthy. Or so I thought. But when faced with ethical challenges he failed miserably. And kept it hidden.
I don’t know how many people know about this aside from his investors. Which is why I am not revealing any names. I was not going to comment on it at all for fear of somehow revealing his identity to people that might know him. I think (or at least hope) I have succeeded in not providing enough detail to accomplish that. The story has not hit the mainstream media. At least not yet. But people will eventually find out. Besides - the man deserves his day in court. A real court, not the court of public opinion.
Once again, what happened here is a major Chilul HaShem and it needs to be recognized as such - even though it is so hard to believe about this man. And there is a lesson to be learned here as well. An old one: ‘Al Tistakel B’Kankan’ our sages tell us. Never Judge a book by its cover. No matter how glossy it is.