BROOKLYN (CN) - Israel's former tourism minister duped a Jewish-American foundation of $545,000 to buy land in the West Bank, then diverted the money and used threats and violence to deny it access to the property, the foundation claims in court.
Bought on the cheap during the Second Intifada, the property next to Rachel's Tomb, in historic Bethlehem, is now worth $5 million to $7 million, according to the complaint.
Rachel's Children Reclamation Foundation and its president Evelyn Haies sued Binyamin Elon, Bnei Rachel Inc., Chearland, Homebred III and American Friends of Beit Orot, in Kings County Court.
Also named as defendants are six current and former directors and officers of the defendant corporations.
Haies and the defendants formed Bnei Rachel, Chearland and Homebred III in the United States to buy, develop and manage three parcels of land next to the Tomb of the Biblical matriarch Rachel in Bethlehem. Haies and the foundation hold 60 percent of Bnei Rachel's shares, 30 percent of Chearland's shares, and 35.8 percent of Homebred III's shares, according to the complaint.
Haies co-managed the corporations with the individual defendants, who served as directors and officers of the three corporations. She claims that after she put down most of the money to buy the lots, Elon and his co-defendants diverted the money to their own use, took control of the property, and stopped her and the foundation from using it.
"Defendant Binyamin Elon, a former Israeli tourism minister and a rabbinical seminary dean (known as a 'rosh yeshiva' in Hebrew) of Yeshiva Beit Orot ('YBO'), and the other individual defendants engaged in deliberate mismanagement, waste of corporate assets, self-dealing of corporate assets and receipt of improper personal benefits over the course of the defendant corporations' efforts to acquire the combined properties," the complaint states. "Specifically, the individual defendants have conspired to prevent plaintiff RCRF from using the combined properties for its organizational functions, as it is entitled to do as a shareholder in all three of the defendant corporations and as the primary funder, albeit through deceit by certain defendants, of the acquisition of the combined properties.
"Defendants Elon and Chaim Silberstein ('defendant Silberstein') proposed the original purchase of a parcel of land in Bethlehem to plaintiffs RCRF and Haies in or about 2000. Plaintiff Haies declined defendants Elon's and Silberstein's request for a charitable donation to defendant Elon's organization and agreed to fund the proposed property purchase through her foundation, plaintiff RCRF, if plaintiff RCRF would use this property for its educational, cultural and religious activities, and defendant Silberstein's group, defendant American Friends of Beit Orot ('defendant AFBO'), would take responsibility for the purchase, development, improvement and management of property that was to be purchased by Bnei Rachel Inc. (the 'BR property'). After receiving plaintiff RCRF's investment for the BR property, defendant Silberstein fraudulently demanded that plaintiffs RCRF and Haies purchase the two adjoining parcels (the 'second parcel' and the 'third parcel') in order to get use and access to the BR property, ostensibly because a building was situated across all three parcels. Plaintiff RCRF and Haies later learned that they were duped into investing in the three defendant corporations, the directors of which have negligently co-managed the combined properties and defeated plaintiffs' right to enjoy the benefit of any of their investments.