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.
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:
…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.…
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: