$13 Million Synagogue Sale Threatened by Power Struggle of Biblical Proportions

A new lawsuit is only the latest sign of an epic power struggle within the Home of the Sages of Israel, a tiny Lower East Side synagogue. The house of worship’s nondescript and rundown building on Bialystoker Place has become the subject of a ferocious real estate battle between different factions, each claiming to be the synagogue’s lawful representative.

In a suit filed two weeks ago – only the latest in a mounting pile of litigation – members of the Orthodox Jewish synagogue’s small congregation allege that Rabbi Samuel Aschkenazi, “who despite his title, is not the rabbi for Home of the Sages,” is attempting to sell the property out from under them to real estate developer Peter Fine – and then split the $13 million profit with Friends of Mosdot Goor, a Gerer Hasidic group unconnected to the synagogue.

The plaintiffs allege that in 2014 Aschkenazi agreed to sell the synagogue property to Fine without consulting the members of the congregation, who are mainly elderly Lower East Side residents. According to the suit, Aschkenazi, the now-disputed president of Home of the Sages (there is a different “pulpit rabbi” who attends to the members’ spiritual needs), does not have legal standing to sell the property.

Peter Fine, a wheeling-dealing New York real estate developer and occasional Broadway producer, wants to buy Home of the Sages and several adjacent properties, including air rights for the unrelated Bialystoker Synagogue, so he can build housing units, according to a 2015 New York Times piece. The property Fine proposes to buy for $13 million was, according to the suit, independently appraised at $42 million, and those opposed to the sale describe the suspiciously low price as a “wholly insufficient firesale.”

Fine, who is not named in the latest suit, declined to comment. Another New York real estate player, the controversial landlord Baruch Singer, has been among those lobbying against the sale. Singer, who grew up on the Lower East Side and is the son of the former rabbi of the nearby Bialystoker Synagogue, told the Times in 2015 that his opposition to the sale was motivated by an interest in protecting the Lower East Side’s Jewish heritage.

The Home of the Sages was founded in 1939, according to Jewish Week. The synagogue is a time capsule of sorts — a relic of an earlier time when the Lower East Side was dotted with tiny storefront synagogues called shtiebels.

In a statement quoted by the Times, Fine cast doubt on Singer’s altruistic motives and suggested he was eyeing the real estate for himself. Singer could not be reached for comment in time for publication.

New York not-for-profit law requires that transactions of real estate owned by religious corporations meet two tests, according to attorney Frank Carone of Abrams Fensterman, who is representing the plaintiffs of the latest suit. “Is the transaction or sale price fair or reasonable? Does the transaction further the interests of the nonprofit?”

Those questions cannot be answered until a court determines once and for all who lawfully represents Home of the Sages, said Carone. He said his clients are not opposed to selling the property per se, but want to make sure that the sale price is fair and the sale represents the interests of the congregation.

The suit also alleges that last year Aschkenazi, in a belated attempt to create the illusion that congregants supported the sale, bused 17 people from Brooklyn and New Jersey to a sham Home of the Sages meeting, where they retroactively voted to approve the property sale and the distribution of the proceeds to Aschkenazi and Friends of Mosdot Goor. Many of the “Bus Congregation” members had “never stepped foot onto the Property before the sham meeting,” according to the suit, and many are affiliates of the Goor sect, “puppets of Rabbi Aschkenazi” who “stand to gain a financial windfall in the event [of] the sale.”

More commonly transliterated as Ger, Goor is a Hasidic dynasty based in Jerusalem — described as “the largest and most powerful in Israel” in a 2016 Haaretz article — with followers in Brooklyn and Lakewood, New Jersey. Friends of Mosdot Goor likely plans to use its $10 million share of the sale to build a synagogue in Israel, according to a legal filing previously mentioned by the Times. Goor could not be reached for comment, nor could the individual members of the “Bus Congregation” named as defendants in the suit.

As a replacement place of worship, Aschkenazi has offered the patrons of the Home of the Sages use of a synagogue located in his Queens home – in exchange for $48,000 in annual rent. (In legal petitions cited by the Times, Aschkenazi described his $3 million cut of the sale as an “endowment” for Home of the Sages, which would be used to fund the replacement synagogue.)

There is a key problem with this scenario, however: Orthodox Jews cannot use motor transportation on the Sabbath, making it impossible for the Lower East Side patrons of Home of the Sages to get to services each week.

The suit also alleges that in the lease agreement for the replacement synagogue, Aschkenazi’s wife, Rathma Bithya Aschkenazi, who signed as “landlord,” used her maiden name in order to conceal her relationship with Aschkenazi.

Aschkenazi, who could not be reached for comment, is already the subject of an unresolved class action lawsuit alleging he used the Home of the Sages name to perpetrate years of charity fraud. Angry former donors filed a lawsuit in 2015 arguing that Aschkenazi pocketed thousands of dollars a year through a misleading fundraising newsletter. The newsletter purported to support a nursing home for elderly and destitute Jewish scholars; although the Home of the Sages property was once used for that purpose, the last “sages” moved out or passed away in the mid-’90s, and the Home of the Sages now leases space to an unrelated for-profit nursing home.

Yet the Home of the Sages was raising some $500,000 a year from donors, the Forward reported in 2015, citing tax filings. When the charities bureau of the New York state attorney general’s office opened an investigation, Aschkenazi purportedly fled to Israel to escape prosecution – shortly after also being served papers by federal agents.

Attorney David Jaraslowicz of Jaroslawicz & Jaros described the entire affair as riddled with conflicts of interest, inconsistencies, and red flags. “The best disinfectant is a little sunshine,” he said, paraphrasing Justice Louis Brandeis.

Jaraslowicz is representing members of the Home of the Sages opposed to the sale in an earlier pro bono case. (Frank Carone of Abrams Fensterman, who filed the recent lawsuit against Aschkenazi, said his firm’s case and Jaraslowicz’s “have a common interest.” He described his suit as narrowly focused on the question of who lawfully speaks for Home of the Sages.)

Jaraslowicz believes Aschkenazi was using Home of the Sages as a personal slush fund. He said that based on his review of Home of the Sages’ 990s – mandatory charity filings – Aschkenazi and others were pulling large amounts of money out of what was supposed to be a religious corporation and giving it to an assortment of groups, including the private school Aschkenazi’s grandchildren attended.

The principal of CKCM Corporation, the operator of the for-profit nursing home that leases space from Home of the Sages, was a business partner of Aschkenazi’s son, now deceased, according to Jaraslowicz and the lawsuit filed by Abrams Fensterman. The suit also alleges that Aschkenazi collects the rent “and retains those payments for his own personal use without remitting them to Home of the Sages.”

New York not-for-profit law requires that the sale of property owned by religious corporations be approved by the state attorney general and the courts; Aschkenazi and Peter Fine have hired a rapid succession of law firms – issuing confusing and sometimes contradictory motions – to push through approval for the unusually cheap sale.

“The developer has been filing a suit a month trying to get around the original suit,” added Jaraslowicz. “[Fine] realized he isn’t going to win the original suit. He keeps changing his positions and is trying to gain some mileage out of flooding us with paper.”

The law firms involved are unusually high-powered for a case involving such a modest real estate transaction. To press their case with the state attorney general, Aschkenazi and Fine hired David Boies, one of the most renowned and expensive lawyers in the country.

Unusually, the recent suit brought by Abrams Fensterman names Goldberg Rimberg & Weg and Fisher & Fisher, two law firms which have represented Aschkenazi and the pro-sale faction, as defendants. The suit alleges they represented Home of the Sages “without the plaintiffs’ knowledge or consent.”

A source with knowledge of attorney Andrew Fisher’s thinking said he read the decision to name the law firms as parties as “overreaching and unnecessary.”

Many of the parties involved could not be reached for comment, despite repeated attempts.

“This case doesn’t pass the smell test,” said Jaraslowicz. “If you dig into it, you’ll faint from the stench.”