Bank Won't Provide Records for Investigation
NEW CITY, N.Y. (CN) - Three orthodox Jewish congregations claim KeyBank won't give them access to their own accounts to investigate a suspected $1 million embezzlement, unless a judge orders the bank to do it.
The congregations claim that KeyBank NA, part of Ohio-based KeyCorp, acknowledged the existence of the accounts - despite the groups' lack of account numbers or other records - but refused access without a court order.
"KeyBank took the inconceivable position that notwithstanding that the congregations are the named holders and owners of its KeyBank accounts, it would not provide the congregations with copies of their own bank records," the plaintiffs claim in Rockland County Supreme Court.
Other banks similarly contacted "substantially complied," the plaintiffs say.
The congregations are based in the hamlet of Nanuet, about 45 minutes northwest of Manhattan in Rockland County.
Each of the three - Congregation and Kollel Noam Elimelech Litzensks, Cong. Lizensk, and Congregation Noam E. Lizensk - is a synagogue or school formed by Rabbi Joseph Mayer, the grand rebbe of the Lizensk sect, a Chassidic group, according to the lawsuit.
Each of the congregations had one or more accounts with KeyBank, the complaint states, with the Key branch in New City - the Rockland County seat - as their home branch.
The lawsuit says the congregations "for many years" employed an administrator who oversaw their day-to-day finances and had signatory powers on the bank accounts.
Recently, though, the congregations "came to the terrible discovery that the administrator had in all likelihood embezzled in excess of $1 million from the congregations," the complaint states.
He was fired immediately and an internal probe was launched "to confirm the embezzlement and determine the extent of the theft and the damage to the congregations," according to the lawsuit.
The congregations hired an investigator, attorneys and an accountant. The probe was complicated by actions the administrator took "to hide his theft," including the destruction of financial books and records, the plaintiffs say.
"Indeed, the administrator did not even leave over a single document or record from which the congregations could obtain the various account numbers for the congregations' accounts at KeyBank," the lawsuit states.
Despite the administrator's actions, Key acknowledged the accounts. The bank also indicated that the administrator had changed the accounts' addresses to his own, the lawsuit states.
Rabbi Mayer, accompanied by the hired investigator, visited various banks seeking account records, the plaintiffs say. But he was turned away by Key.
"KeyBank's refusal is improper and without merit," the plaintiffs say.
"Without intervention from the court, the congregations will be unable to obtain access to their accounts and their account documents."
The plaintiffs want a judge to declare them the lawful owners of the Key accounts, and to order KeyCorp and KeyBank to hand over all documents and records to them and no one else. They want any old signatories removed and new account signatories accepted.
They also want Key to pay them what's left, "upon the execution and delivery to the bank of a properly executed withdrawal slip by the congregations."
Therese Myer, vice president and director of public relations for Key in Albany, said the bank does not comment on pending litigation.
KeyCorp was based in Albany before a 1990s merger moved its headquarters to Cleveland. The company has more than 1,000 branches in 12 states.
Manhattan attorneys David Wolkenstein, of Lauterbach Garfinkel Damast & Hollander, and Frederick Sosinsky represent the plaintiffs.