Australian Court Finds Leading Chabad Rabbi Joseph Gutnick Defrauded A Fellow Chabadnik In $1 Million Mines Deal

The Australian-based Joe Gutnick, the late Chabad-Lubavitch Rebbe's handpicked emissary to Israel and an internationally known mining magnate who has allegedly swindled hundreds of millions of dollars from fellow Chabadniks (mostly ba'al teshuvas) and others, has just lost a $1 million dollar suit. Gutnick in effect swindled a fellow Chabadnik, Roy Tashi, out of a million Australian dollars after offering to help Tashi get out of his financial crisis. the judge also found that Gutnick's testimony was unreliable and evasive.

Rabbi Joseph Gutnick

Joe Gutnick allegedly has pulled off other large affinity pump and dump stock scams with the help of various haredi – mostly Chabad – charities.

When the Chabad-Lubavitch Rebbe was alive, he allegedly helped Gutnick carry out those one of those alleged scams. Hundreds of ba'al teshuvas in Crown Heights lost their life savings while top Chabad leaders and Chabad charites made millions.

Gutnick also allegedly knew about child sex abuse cases in Chabad of Australia but failed to report the crimes to police. Gutnick did, however, make sure to keep one of the pedophiles, David Cyprys, away from Gutnick's children.

Roy Tashi filed suit against Gutnick in April after Gutnick characteristically refused to give Tashi back teh money he swindled from him.

From this week's court decision:

Gutnick's lack of honesty:

…I did not find Mr Gutnick’s evidence reliable. I am not prepared to accept his evidence unless it is corroborated.

Mr Gutnick did not answer questions directly and was often evasive in his answers.

I find that Mr Tashi was an honest witness.…

Findings of fact:

…Issues

22 Thus, the main issues to be resolved are as follows:

(a) Did Mr Gutnick make to Mr Tashi the three alleged representations?

(b) Was Mr Tashi aware that the seller of the NCRC shares was Mr Gutnick’s company, as either Mr Gutnick had expressly told Mr Tashi that he was selling the shares and/or Mr Tashi was aware from the fact that Mr Gutnick signed the share sale agreement as a director of the seller or was otherwise aware?

(c) If any of the alleged representations were made, did Mr Tashi rely on them in causing his company to acquire the NCRC shares?

(d) If Mr Gutnick did make the alleged representations, did NCI aid and abet the alleged breaches of the Corporations Act 2001?

(e) Was Mr Gutnick obliged to provide to Mr Tashi a product disclosure statement?

(f) Did Mr Gutnick owe Mr Tashi fiduciary duties, and – if so – did he breach them?

(g) Did Mr Gutnick engage in unconscionable conduct in selling the NCRC shares to Mr Tashi as he did?

(h) Does Krypton have standing to rely on Mr Tashi’s allegations?

23 For the following reasons, I have concluded that:

(a) Mr Gutnick did make to Mr Tashi each of the three alleged representations and that the representations were misleading or deceptive.

(b) Mr Tashi was not aware that the seller of the NCRC shares was Mr Gutnick’s company.

(c) Mr Tashi did rely on each of the representations in causing his company to agree to acquire the NCRC shares.

(d) NCI did aid and abet Mr Gutnick in his conduct.

(e) Mr Gutnick was obliged to provide to Mr Tashi a product disclosure statement.

(f) Mr Gutnick did not owe Mr Tashi a fiduciary duty.

(g) Mr Gutnick did not engage in unconscionable conduct.

(h) Krypton does have standing to rely on Mr Tashi’s allegations.

24 Accordingly, I have decided to order that the share sale agreement be rescinded and that the defendants be ordered to repay the plaintiff AU$1 million.

25 I shall hear argument on interest and costs.…

The entire decision as a PDF file:

Download Roy Tashi v Joseph Gutnick 8-27-2013

Update 9-2-2013 – Tashi's letter to the dead rebbe asking for help and Gutnick's apparent exploitation of that.

More Rabbi Joseph Gutnick Scams Posts.

Comments

[ruthie]

when i lived in crown heights he was like the mick jagger of the times there....everyone thought he was the best thing since white bread...
my senses always but always said...something is not right
or something smells in denmark.
i guess he got too greedy too....
etc.

[Yosef ben Matitya]

ken yovedu kol oyeveikho hashem!

[rebitzman - $101 to read my posts]

Clearly the judge is an anti-semite.

[Wes Sesniak]

As long as they screwing up each other and leave the rest of us alone, who cares?

[S M L]

"..As long as they screwing up each other and leave the rest of us alone, who cares?..."

Umm - because that's what decent people do? Because the children of these BTs who were ripped off are having their lives ruined? Because these f-ing Chabadniks thing they're above it all and can do what they want - and now they are learning they can't. Many reasons. Think about it.

[Shmarya Rosenberg]

S M L –

Wes is an anti-Semite. He lacks the ability to reason logically, and he certainly has no concern for innocent Jews hurt by Gutnick.

[Isa]

There was this fellow in my old community in the City of St Louis Park that was always trying to get me to place my 401K/IRA with him. Good interest all the time he said.
Fxck Yxu I keep my money in a recognized institution

I wonder if this fellow was investing with Madoff? Madoff paid out 10 to 11 % interest and these guys would then pay out 8 to 9% interest. The 2% was easy money!

Anybody there know the rest of the story?

[Wes Sesniak]

Shmarya - How do these Chabadnik folks got their millions? Don't tell me by the old fashioned way, by working from 9 to 5 and earninig ,...

[Edith]

Tashi is not chabad he is a really nice guy. Oops that didn't come out right. He was having financial problems so Yossel said have I got a deal for you. I am very happy for him and sorry he had to go through so much agmas nefesh to get his money back.

[Shmarya Rosenberg]

Edith –

The court document, which you can read, identifies him as a member of the Chabad community – and he is.

[Shmarya Rosenberg]

Wes –

You are a sick person. These people lost their life savings. And, yes, the vast majority of them worked very hard (and legally) to save that money.

You are an anti-Semite, Wes. And you're also way stupid.

[Edith]

Shmarya, dovining in a Chabad shule doesn't make you a Chabadnik, but that is really beside the point. I am very happy he won, and will get his money back and hopefully some interest to boot, which he can give to the Shule (Rabbi Groner's SIL).

[rebitzman - $101 to read my posts]

Edith - from the document: Mr Tashi and Mr Joseph Gutnick (the first defendant) are both members of the Chabad Lubavich movement. The now deceased head of the movement was Lubavicher Rebbe Mendel Schneerson (the Rebbe).

Are you suggesting the court lied?

[Wes Sesniak]

"And, yes, the vast majority of them worked very hard (and legally)"

Shmarya ,

Are you trying to convince me that those down under are more honest, industrious, dilligent and hardworking than those in Mea Shearim or New Square?

[Shmarya Rosenberg]

You're a racist bigot, Wes, and you're dumb as a tree stump. I'm not trying to convince you of anything other than those two facts.

As for the people who lost their money, the vast majority were and are law abiding.

You're sick. And you are very stupid.

[Aussie]

@Edith....
Go and actually read the court documents....

It clearly states that Tashi went to Gutnick....

About the only thing that Shmarya may have got wrong is the part about Gutnick being Melbourne based since he now lives in Singapore....
The reason he is there I'm guessing Shmarya will report on in like 2-4years from now when the next wave of suckers have lost their money and cry "scam"....

[Aussie]

@Wes...

You are an idiot....Tashi had money long b4 he found Chabad.....

And yes....Everyone in Australia(even the goyim) are much smarter then morons like you from the USA....))

[Edith]

@Aussie, let me rephrase that. Tashi was having financial problems so he went to Yossel, who said 'have I got a deal for you' and then sold him worthless stock and didn't tell Tashi they were his stock. Chaching.

I am very happy for him and sorry he had to go through so much agmas nefesh to get his money back.

Your last comment is worse than the one you are criticising.

[happycat]

what's the big deal about this story?

everyone knows the guy is scum

there are a lot worse things yossel has on his conscience than the tashi story

[Wes Sesniak]

Shmarya,

What's the percentage of those in Mea Shearim or New Square are honest don't milk the welfare system and hold a job a real job? How many of them have no earned income but have a decent house and can afford to pay a house mortgage ?

What makes you think and what proof do you have that those in Astralia are any better ?

[Shmarya Rosenberg]

You're an idiot, Wes.

There is no comparison between Chabad in Australia and New Square or Mea Shearim when it comes to employment, secular education, etc.

You're a rank anti-Semite who is – like most of your fellow travelers – ill educated, uniformed and really stupid.

[R Nash]

Sadly, this is Gutnik's pattern, and it did not have to be this way. I feel it comes from amassing wealth without education. You begin to think you are smarter than everyone, you surround yourself with an echo chamber of sycophants and then you thumb your nose at society's laws. So many of these tycoons end up in moral and legal heaps of rubble, it is really sad.

In Gutnik's case, his most famed indiscretion was the 1993 GCM "pump and dump" that used the Chabad Rebbe's own endorsement as a catalyst to bait BT Lubavitchers into a very sketchy mining deal, by implying that he had found evidence of diamonds, and that the Chabad Rebbe had prophesied that he would find a huge diamond mine. The CR had just had a stroke at that time but his office was still supporting those who called into buying into Gutnik's scam albeit in "lukewarm" fashion. The standard answer from 770 was "those who want to can buy GCM shares". Throughout the next three years, with no news, BT's were convinced by unscrupulous shluchim and mashpi'im (or perhaps innocent dupes) that this was a test of faith in the Rebbe. By 1996, the stock collapsed, GCM "dumped", and the diamond prophecy was being spun into apologetics. I refuse to believe that the Rebbe himself meant to support a pump and dump scheme, and that it was merely Gutnik who used a previous encounter with the Rebbe in 1988 to his advantage. The Rebbe was in no condition to say much in 1993. His office was not on fire to push the investment as I said, so that would also support the contention that they were not on the inside, though they did not disassociate from it either. However, as with SMR, because Gutnik had been a big money source for institutions of Chabad, many forgave his sins and accused his detractors of anti-semitism or just plain "sour grapes".

To Shapira Shachuna, Tofutti, and dozens of real estate speculators and scammers in Crown Heights, the BT's of Chabad were always easy marks. With their common sense compass taken away and replaced with blind belief, lead them into the woods blind folded and then run.

It is important to note here at the end that the Chabad Rebbe was never involved or implicated in any of these scams to my knowledge, and that in some cases, the Chabad courts did take action against the scammers.

[Isa]

Wes Sesniak:

The difference between New Square and Mea Shearim and elsewhere say that the Minneapolis area; are that there are no great concentrations of Jews elsewhere to get to bloc voting where politicians can be influenced by just the Jewish vote.

I WAS a member of the Orthodox community in Minneapolis and 98 to 99% of Orthodox Jews and that includes Chabad and anybody else, had jobs and are decent folks. I NEVER knew anyone that was a welfare parasite. Of course there might have people that had kids and the husband ran off and got aid [never heard of any though]

The Orthodox grade school in Minneapolis taught secular subjects math, science , English etc.

[Shmarya Rosenberg]

Oh, please.

Chaabd organizations were clearly deeply involved in Gutnick's pump and dump scheme. Instead of spouting off as if you are some type of authority – which you are not – read the posts I linked to – especially this one:

http://failedmessiah.typepad.com/failed_messiahcom/2008/03/chabad-aish-har.html

As for the Rebbe, his words to Jimmy Gourarie after Jimmy was arrested for defrauding the federal government are telling.

He told Jimmy that Jimmy had to step down from the leadership of Agudas Chasidei Chabad (Aguch), not because he was a criminal, but because it didn't look good for him to remain on Aguch board.

Jimmy went on to build the massive new mikva in Crown Heights, largely with stolen money – with the Rebbe's support and blessings.

[Aussie]

@happycat...

Gutnick is scum??....

I'll keep that in mind when I visit the Chabad house which Gutnick paid for on rosh hashana....

Sure he has done bad in his life(so have we all) but at the same time he has done good....
Without the good that he has done those like me would have zero connection to Judaism today....

[Yosef ben Matitya]

Without the good that he has done those like me would have zero connection to Judaism today.... Posted by: Aussie

a foolish statement. can't you afford to pay your dues to a normal and honest jewish synagogue? they led you to nothing really jewish. a cornucopia of idolatery and thievery. check out the halakha of the stolen lulav and the stolen aravo!

[Aussie]

@Yosef...
Thanks for your concern....Of course I can afford a normal shuel....If there was one here...But there isn't...
I'm a proud supporter of the local Chabad house and I'm looking forward to being there tonight for rosh hashana...

[Mervyn]

Why is it that those who attach Chabad are Anti-semitic but when Chabadniks rip off members of the Jewish community people rush to defend the good they do, with other people's money? And the child and wife abuse that goes on in the Frummer community just gets swept ubder the carpet.
There are good and bad in all communities, but when the bad is cut out do not try and defend it