Inside The Elie Wiesel Foundation

From the Times of London Dec. 20, 2008:

It takes an extraordinarily heartless conman to swindle a survivor of Auschwitz and Buchenwald and Nobel Peace Prize winner out of all his charitable funds.

Yet that is exactly what Bernard “Bernie” Madoff is alleged to have done to Elie Wiesel, the author of the Holocaust classic Night and a friend from the Jewish community in south Florida.

The Elie Wiesel Foundation for Humanity now admits that it invested $15.2 million (£10.1 million) with Mr Madoff that represented “substantially all of the foundation’s assets”. The charity of the Nobel laureate, in New York, will have to raise new funds if it is to maintain its two centers in Israel that help Ethiopian Jews and Darfur refugees and continue its other work.

“We are deeply saddened and distressed that we, along with many others, have been the victims of what may be one of the largest investment frauds in history,” a spokesman for the foundation said.

There are so many things wrong with the Elie Wiesel Foundation’s 2007 990 filling with the IRS.

The Elie Wiesel Foundation had $9 million in assets (2007 990 filing, 2006 filing).

The trades page indicates a loss from the sale of option. The Internal Revenue Code specifically lists options as inappropriate for a charity to trade in. The foundation managers may have liability to the US taxpayer. Also, the foundation grew to about $9 million as it got $6 million in grants from the public – 2007 was a good year. Of course, Madoff traded 78 million dollars, so he churned the foundation nine times. Was it asleep at the wheel?

I’m told: If you invested with Bernie Madoff, your form 990 should read a simple one sentence line item that funds are at Madoff Investments. EWF (Elie Wiesel Foundation) listed instead a whole series of securities, etc, to the point of absurd over-trading as you rightfully point out. But if they lost 100% with Bernie, then the listing of securities held is impossible. The whole report of securities and investments was a sham, and now they got caught. For professionals, the listing of securities on the form is impossible if the funds were with Bernie. It is an either/or proposition. Huge ooops.

The Form 990 for 2007 was only posted on ElieWieselFoundation.org AFTER the Madoff collapse, and it undated and unsigned. The phone number on both the 2006 and 2007 Form 990s is disconnected. They gave a false number. The Form 990 lists attorney Howard Sobel as corporate secretary and treasurer. That would be the guy in the hot seat right now. Sobel is a big time white crime lawyer at Latham and Watkins. If you go to giving wisely.com, the address, contact and registered attorney of Elie Weisel Foundation in Israel are false.

In the 2006 990 filing, the corporate treasurer is listed as Elie Weisel’s son at Goldman Sachs and the corporate secretary is listed as someone else. In the hastily filed Form 990 for 2007 both positions have been changed and combined on page 30 and are listed as a litigation attorney at Latham and Watkins, Howard Sobel.

The filings for 2006 and 2007 say there are no employees and no independent contractors.

Here is my original posting: "The Elie Wiesel Foundation does not have clean hands."

Page 29 of the 2007 Form 990 list over $400,000 in expenses to the Israel Project Consulting LTD, which is the company of Shira Berliner Bodner acting as an external manager for American philanthropies.

Shira Berliner-Brodner ran the Elie Wiesel Foundation. For years there have been numerous postings on the web alleging she commits financial improprieties, including this press release from who? It poses as the release from the winning side in a legal dispute but it could be somebody with an agenda who’s plastered it all over the web. I post it because it seems particularly relevant in the light of the Elie Wiesel Foundation’s financial meltdown caused by its lack of oversight on its investments:

FOR IMMEDIATE RELEASE DISTRICT COURT ORDERS ELIE WIESEL FOUNDATION EXECUTIVE DIRECTOR’S ASSETS FROZEN UP TO US$ 10.4 MILLION

Potential Co MIngling with Foundation’s Assets Asserted by Creditors

Jerusalem August 23- Jerusalem District Court Justice Moshe Ravid issued a temporary freeze on all bank and financial assets up to $10.9mm of Shira Berliner-Bodner, the Executive Director of the Elie Wiesel Foundation in Israel.

Bodner, a resident of Raanana, is the wife of attorney Mark Bodner, Managing Partner of Tel Aviv law firm Bodner, Flom.. The freeze enforces a prior order of the Justice Terry Hatter in United States District Court against Berliner Bodner and her wholly owned investment firm. The ruling marks the end of a long and arduous international effort to secure Ms Berliner-Bodner’s assets under the California judgment.

Ms Berliner-Bodner had resisted enforcement of the order since 2001, seeking refuge in Israel a traditional haven against enforcement of US judgments. Justice Ravid’s order establishes important precedent in Israeli recognition and enforcement of American judicial orders against American citizens resident in Israel, and represents an important step forward in honoring and enforcing international judgments by the Israeli bench.

The case had gained considerable notoriety in Jewish philanthropic circles for pitting two major Holocaust charitable organizations and world class fundraising foundations against one another.

The freeze was requested by Jaime Sohacheski, Chairman of Crown Realty & Development, Beverly Hills philanthropist and one of the most significant contributors to the Simon Wiesenthal Center. In securing the ruling of $10.4mm against Berliner Bodner, Sohacheski asserted among other claims fraud and racketeering.

Ms Berliner-Bodner elected not to contest the charges in US District Court, and then resisted to date all enforcement in Israel. Mr Sohacheski was represented by the prominent Israeli law firm Yigal Arnon.

Howard Sobel, partner in the New York office of Latham & Watkins law firm and Corporate Secretary for the Elie Wiesel Foundation, declined comment on the freeze on Ms Berliner-Bodner’s assets, nor on the assertion that donated assets of the Foundation may have been co-mingled with Ms Berliner-Bodner’s new firm, Israel Project Consulting.

The revelation that Elie Wiesel and the Foundation’s senior staff knew of Ms Berliner-Bodner’s default on judgment for a number of years represents another startling setback to the Nobel Prize winner’s reputation.

Mr Wiesel became a source of considerable controversy earlier this year when allegations of misrepresentations of fact emerged regarding his accounts of the Holocaust, after his book Night was picked by Oprah Winfrey as a major non-fiction selection for her national book club.

In a related matter, Ms Berliner-Bodner’s former husband filed and received Innocent Spouse Relief from the US Internal Revenue Service for false tax filings submitted under his identity by Ms Berliner-Bodner, as well as filing false representations of sources of capital. Filing false tax claims as well as sources of capital potentially carry both civil and criminal penalties in the United States. Ms Berliner-Bodner had previously admitted under oath to having stopped filing all corporate and personal tax and regulatory filings and required recordkeeping from the date of hiring her divorce counsel over a decade ago.

"This marks the end of a long and arduous process chasing Ms Berliner Bodner for years around the globe", stated a member of the creditors committee in the name of Mr Sohacheski. "We expect Mr Wiesel and the Foundation to cooperate fully with the investigation of comingled assets and return all funds to the rightful creditors".

Jerusalem District Court Case No.5276/06 Ruling 2571/06 (Public Record) US District Court, Central District California Case No 96-5520-TJH (Public Record) Yigal Arnon Law Firm Advocate Mordechai Beech (02) 623 9240 Elie Wiesel Foundation Howard Sobel, Esq Latham & Watkins (212) 906-1200 Jamie Sohacheski Crown Realty & Development (310)659-9977 Shira Berliner Elie Wiesel Foundation