Chabad's Rabbi Joseph "Diamond Joe" Gutnick, the Australian mining magnate with a history of questionable business behavior, is now claiming to be nearly destitute. But is that claim simply a ruse meant to help him avoid paying $55 million he owes to an Indian company?
Above: Rabbi Joseph Gutnick
Diamond Joe Gutnick Claims To Be In Serious Financial Difficulty, Allegedly Won’t Be Able To Pay $55 Million Arbitration Award
Shmarya Rosenberg • FailedMessiah.com
Rabbi Joseph “Diamond Joe” Gutnick is in deep financial trouble – or at least that’s what Gutnick is claiming.
The Chabad mining magnate who some accuse of affinity fraud has been hauled into court yet again, this time by an Indian company, Indian Farmers Fertiliser Co-operative, which as FailedMessiah.com previously reported is suing Gutnick, who has refused to pay a $55 million award issued by the Singapore International Arbitration Centre in May.
Gutnick is leaking claims that he’s nearly insolvent. He claims to be behind on his rent and claims he had to lay off his security detail and several close staffers, including long-time personal accountant.
“It is tough times, I don’t deny it,” Gutnick told the Herald Sun. But Gutnick also claimed that metals and diamond prices would rebound soon, and he'd be back on his feet again.
“If [Gutnick] loses this judgment, he just won’t have the capacity to pay,"an unnamed source who supposedly knows details of Gutnick’s finances told the paper. It’s not looking good for him.”
Like he has previously, Gutnick denied any wrongdoing on his part and called the Indian company’s claims “speculation.”
But there are those familiar with Gutnick’s history who doubt both his claims of innocence and his claims of near-insolvency.
Earlier this year Gutnick was sued by businessman Benjamin Koppel after Gutnick allegedly welched on a $750,000 debt repayment.
Gutnick was also pushed out as chairman of Blackham Resources, which claimed he broke a deal to invest a large amount of money into the mining company. He also faced legal troubles related to that agreement.
In 2013 Gutnick was sued by a fellow Chabad hasid, Roy Tashi, who claimed Gutnick had defrauded him of almost $1 million. Tashi won the suit and was awarded a $1 million judgement. “Mr Gutnick led Mr Tashi to believe that his object was to help Mr Tashi. In fact, Mr Gutnick’s object was to line his own pocket at Mr Tashi’s expense,” the judge ruled at the time.
Gutnick’s mining company allegedly ran a pump-and-dump stock scheme two decades ago that saw hundreds of Chabad hasidim invest large amounts of money, sometimes their entire life savings, with Gutnick after Gutnick used a blessing given him by the now-late Chabad-Lubavitch rebbe Rabbi Menachem Mendel Schneerson and Schneerson’s repeated predictions that Gutnick would discover gold
and diamonds in the deserts of Australia to persuade them to invest.
At the same time, several Chabad nonprofits and at least one haredi nonprofit, Aish HaTorah, were reportedly ‘gifted’ large amounts of the stock, allegedly by Gutnick, or bought large amounts of the stock.
Then, at what many believe to be Gutnick’s orders, the nonprofits sold their stock as did other people close to Gutnick.
But no one told the common Chabad investors, many of whom were ba’al teshuvas, to sell. Almost overnight their investments that had been worth large amounts of money on paper were suddenly worth only pennies. Many of these families were devastated while some were even left destitute.
Gutnick was appointed by Schneerson as his special emissary for the “wholeness of the Land of Israel” and was tasked with stopping any peace process based on giving up part of the biblical Land of Israel to Palestinians (or the Arab states) in exchange for peace. Gutnick massed Chabad hasidim to help Benjamin Netanayhu win his first term as prime minister in 1996, in part by using racist slogans that included “Bibi is Good for the Jews.”