Chabad mining magnate Rabbi Joseph Gutnick allegedly tricked a man who
came to him for financial help and swindled $1 million from him in a
pump-and-dump stock swindle, a Melbourne court was told this week.
Rabbi Joseph Gutnick
Chabad Rabbi Joseph Gutnick Sued For More Than $1 Million In Pump-And-Dump Stock Scheme
Shmarya Rosenberg • FailedMessiah.com
Chabad mining magnate Rabbi Joseph Gutnick allegedly tricked a man who came to him for financial help and swindled $1 million from him in a pump-and-dump stock swindle, a Melbourne court was told this week.
According to the Herald Sun, Roy Tashi told the Supreme Court that he went to Gutnick for help after losing his $500,000 per year job in 2010 and was in such financial difficulty that he was about to sell his family’s home.
"I was stretched financially. Mr. Gutnick appeared to be sympathetic to my situation. I trusted him,” Tashi told the court.
Tashi testified that Gutnick convinced him to buy shares in a company that was mining gold in Canada. He said Gutnick told him that he had shares he could have sold to Tashi at a "bargain price.” But Gutnick allegedly claimed that he could not be personally involved in the sale because he was on the company’s board of directors and was the company’s chairman.
Tashi testified that his dire financial situation he arranged for his company to buy $1 million worth of those shares on a payment plan, believing Gutnick’s claim that he would soon be able to sell the shares at a good profit – a tactic Gutnick has allegedly used in the past to ensnare naive or desperate investors.
Tashi told the court that he did not properly assess the risk of the investment because he "relied on the goodwill of Mr Gutnick" – a pillar in the local Chabad community and worldwide.
"I knew Mr Gutnick as very generous, someone I had respected. This, to me, was not a typical investment. It was an opportunity to retrieve some of my financial standing in a relatively short period of time. I wouldn't have bought them if I knew he was selling them to me at market price, not bargain price," Tashi testified.
Tashi is suing Gutnick for $1 million in actual losses plus damages. The suit claims that Gutnick was misleading and deceptive, and didn't make the proper disclosures required by law.
Tashi says he paid 15 cents per share more than Gutnick, that Gutnick had a stake in the company that handled the transaction, and that the shares Tashi purchased now had no value.
Gutnick denies liability and the case is continuing.
Gutnick served as the late Lubavitcher Rebbe Menachem Mendel Schneerson’s personal emissary to the State of Israel with special responsibility to block any land for peace deals with Israel’s neighbors of the Palestinians.
He is widely known for putting millions of dollars into right wing politician Benjaimin Netanyahu’s 1995 campaign for prime minister, and marshaling Chabad’s resources to turn out the vote for Netanyahu. He was responsible for the campaign slogan, “BB is good for the Jews” – implying the other candidates, all Jewish, all Israeli patriots, were not.
Gutnick has also been linked to other affinity stock swindles and pump-and-dump scams, but has yet to be indicted or convicted of any wrongdoing – even though dozens if not hundreds of Chabad followers in Crown Heights and Kfar Chabad alone, many of them ba'al teshuvas and converts, allegedly lost their life savings.
Gutnick, who comes from a well-connected old-line Chabad family, is still a pillar of the Chabad community.
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