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Wednesday, February 12, 2014

Israeli Prosecutors Poised To indict Associate of Controversial Rabbi Yoshiyahu Pinto

Rabbi Yoshiyahu Pinto

The prosecution has tentatively decided to indict a close associate of Rabbi Yoshiyahu Pinto on corruption charges for the associate's mismanagement of a now-defunct charity, Hazon Yeshaya.

Abraham Israel was informed Tuesday of the tentative decision to indict him for aggravated fraud, falsifying corporate documents, embezzlement, money laundering and obstruction of justice – charges that would only become final after a hearing at which Israel could seek to refute the allegations.

Israel's lawyers have called the suspicions baseless. Pinto, for his part, is in the middle of another corruption case involving alleged bribes of senior police officials.

Hazon Yeshaya, which Abraham Israel founded in 1998, raised money around the world for its soup kitchens in Israel; it also received funding from the Education Ministry and the Jerusalem municipality. In 2010, it had turnover of 40 million shekels ($11.4 million). Some of its donations were used to buy property worth tens millions of shekels.

In November 2011, following complaints from donors who said they had been cheated, a liquidator was appointed. The liquidator discovered that Hazon Yeshaya actually distributed only around 3.6 million shekels a year to the needy, rather than the 33.5 million shekels it claimed in its financial statements.

A police investigation has raised suspicions that millions of shekels had been diverted from the charity to a bank account affiliated with Pinto. In an effort to obtain information about that probe, Pinto allegedly tried to bribe a senior police officer, Ephraim Bracha.

After Bracha reported that attempt, for which the attorney general is now considering indicting Pinto, the rabbi tried to obtain immunity by offering information about alleged bribes given to another senior police officer, Menashe Arviv.

Prosecutor Uri Corb outlined the suspicions against Israel, who served as Hazon Yeshaya’s CEO, in a letter to his lawyers on Tuesday. According to Corb, Israel misled donors about the scope and nature of Hazon Yeshaya’s activities, both orally and in writing.

He allegedly told donors the charity fed 15,000 needy people every day, when actually it fed far fewer, ranging from a few hundred to a few thousand. He allegedly said the charity only helped people classified as needy by the welfare authorities, including many Holocaust survivors, when actually this was only true of some recipients.

On Israel’s orders, Corb continued, the charity prepared fake lists of the people it fed to inflate the scope of its activities. These lists were shown both to donors and to government agencies like the Social Affairs Ministry in order to obtain donations, meaning these donations were obtained fraudulently.

In addition, some of the money donated to the charity was used not to feed the hungry but to support yeshiva students and subsidize yeshivas’ purchases of meat, Corb said, adding that income and expenses from these transactions were falsely recorded as donations on the charity’s books.

Finally, Corb said, Israel paid two former Hazon Yeshaya employees tens of thousands of dollars to keep them from telling what they knew about the charity’s transgressions, and also paid off another employee to keep him from going to the police.

Corb stressed that the letter relates only to the suspicions against Israel, not to those against Pinto, about which the prosecution has not yet made a decision. Nevertheless, he said, Pinto will probably be called as a prosecution witness against Israel, so the fact that both are represented by Eli Zohar’s law firm creates “a real fear of a conflict of interests.”

Israel’s lawyers, Ilan Sofer and Guy Wilf, said in a statement the prosecution’s suspicions were so baseless they didn’t even provide grounds for a civil suit, much less a criminal proceeding. Even the prosecution hasn’t accused Israel of taking any money for himself, they added.

According to the lawyers, Hazon Yeshaya fed tens of thousands of needy people until the investigation caused it to collapse, “and no other organization has taken its place and filled the void.” The investigation thus wreaked havoc both on Israel, who “was forced out of his job ... and saw his life’s work destroyed,” and on the needy the charity once supported, “who aren’t receiving food or aid from any other source,” they wrote.

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