Federal investigators have been speaking to investors involved in real estate projects connected to Rabbi Yoshiyahu Yosef Pinto, who was arrested in Israel for alleged bribery last month. The arrest came amid claims that millions of dollars in real estate investments he’s connected to cannot be accounted for, and that investors may have been threatened by officials close to the spiritual leader.
Pinto — the head of the New York-based nonprofit organization Mosdot Shuva Israel and an advisor to a number of high-profile New York real estate figures — was placed under house arrest after allegedly trying to bribe an Israeli police officer in order to get information about an alleged money laundering and bribery probe.
The combination of Pinto’s arrest and the August arrest of one of his former aides, Ofer Biton, in New York, is raising new concerns among law enforcement officials that Pinto’s philanthropic and political fund-raising activities may be connected to losses at a number of distressed real estate projects in New York that are controlled by his associates.
Almost all of the properties linked to Pinto are owned by his aides or his organization, so it’s impossible to tally exactly how much real estate the rabbi owns, according to multiple sources.
Biton — who is also a former fund-raiser for Republican Rep. Michael Grimm of Staten Island — was arrested on charges of immigration fraud after making false statements on an immigration form in 2010 while flying from LaGuardia Airport to Fort Lauderdale. He is suspected of lying about the source of money he had transferred to a U.S. bank account. Investigators are looking at whether those funds were connected to illegal campaign contributions to Grimm. Pinto supporters, however, claim that they were victims and that Biton embezzled funds from the cleric’s organization to help finance the 2010 campaign.
John Meringo, an attorney for Biton, told The Real Deal that his client “has done nothing criminal,” but declined to comment on his connections to Pinto’s organization.
Robert Nardoza, a spokesman for the U.S. attorney’s office in Brooklyn, also declined to comment. An FBI spokesman did not return calls.
Meanwhile, New York–based attorney Arthur Aidala, Pinto’s U.S. lawyer, denied that Pinto did anything wrong and noted that the Israeli legal system allows suspects to be held without formal charges.
He told TRD that support for the controversial rabbi has been “through the roof” here and that there has been no direct impact on Pinto’s local business interests.
The Israeli-born Pinto founded Shuva Israel in 1997 and has grown the nonprofit into a major educational and social services group with thousands of followers around the globe. While an Israeli citizen, Pinto spends a considerable amount of time in New York and has a townhouse at 409 East 58th Street. (The townhouse is in the name of Pinto’s organization and a Pinto associate. Lenders filed to foreclose on the property in 2009.)
Still, his friends in the real estate world — including New York superbroker Ilan Bracha of Keller Williams NYC; investor Haim Binstock, a principal at Keller and a cofounder of B&B Investment Group; and high-powered attorney Morris Missry, chairman of the real estate department at the law firm of Wachtel, Masyr & Missry — have been mum on Pinto’s recent arrest.
Missry, a frequent political bundler for former Rep. Anthony Weiner, told TRD that he was completely unaware of Pinto’s arrest.
He said he was “shocked” by the news.
Pinto has come under tighter scrutiny in recent years, amid questions about his growing influence in U.S. political and financial circles, as well as the financial dealings of many of his associates.
The political and financial tumult has spilled over into millions of dollars in real estate deals linked to the cleric, sources told TRD.
Bracha declined to comment on the Pinto investigation, but confirmed to TRD that a 2,800-square-foot ground-floor property at Heritage at Trump Place, an Upper West Side condo, has been on the market for $1.75 million. Bracha, Pinto and Binstock had planned to build a synagogue there, but defaulted on $1.2 million in loans.
Bracha is marketing the property, a commercial condo, through his firm Keller Williams NYC.
Robert Holland, an attorney representing the board at Heritage at Trump Place, said lawyers have been trying to hash out a deal to settle the litigation that stemmed from a foreclosure suit after the partners defaulted.
“We’ve been talking with the unit owners’ attorney about a settlement,” Holland said.
Meanwhile, Ben Zion Suky — a real estate developer with Manhattan-based Livorno Properties and a top aide to Pinto — is also embroiled in a wide range of legal troubles in connection with his distressed real estate across the city. Pinto is linked to the Livorno deals, as documents obtained by TRD show Suky was granted power of attorney from Pinto’s wife in 2006.
Suky and Joseph Ben Moha, codevelopers of the Mave Hotel at 62 Madison Avenue, threw the property into bankruptcy in March after their mezzanine lender was about to foreclose on the debt.
Textron Financial, a Providence, R.I.–based lender, had originally filed suit in 2010 after the developers defaulted on $16.5 million in loans at the property.
Charles Ira Epstein, an attorney for several investors at the hotel, alleged in court documents that his clients were repeatedly harassed and threatened by Moha and Suky after requesting financial records of the hotel. Sources told TRD that Pinto also made threats and that those threats were disclosed to federal investigators. Epstein declined to comment when contacted by TRD.
Court records obtained by TRD show that lenders rejected a reorganization plan for the hotel and that the property will be auctioned off to maximize its value in a sale. The New York office of London-based Savills has been retained to market the property pending approval of the U.S. Bankruptcy Court.
Neither Kelly Griffin, an attorney for Suky, nor Moha was immediately available for comment.
There are additional troubled properties tied to the Pinto aide. Suky and investor Yossi Zaga are facing multiple lawsuits at a Yorkville property — a condo conversion called the Duplex at 215 East 81st Street.
In 2009, they were sued after defaulting on a $14 million loan from Marathon Asset Management that was used to convert the 37-unit rental building to condos. The investors failed to fund the building’s reserve fund and missed monthly mortgage payments; the loan was later sold to new investors.
The property was in such poor physical condition that a receiver was appointed after Suky and Zaga failed to repair millions of dollars of construction defects and code violations ranging from nonworking cellar drains to rotting cellar doors and faulty fire exits, according to court documents.
Suky and Zaga also failed to pay tens of thousands of dollars in common charges at the building, according to court documents.
Victor Metsch, an attorney for apartment owners at the building, said this case involved a “perfect storm” of a defaulting sponsor, unpaid contractors and lenders foreclosing on the debt.
“This trifecta of claims and disputes has victimized the owners who purchased their units in a good-faith belief that they were buying into a properly built, well-organized and functioning condominium,” he said.
Eric Anderson, the court-appointed receiver at the building, said last month that about 30 units in the building have been sold, with about 10 remaining.
Anderson said that current code violations at the building are being corrected, and the building is working on getting Fannie Mae and FHA approval.
In the family
As TRD and others have reported, Pinto’s wife Debora Rivka Pinto reportedly attempted to commit suicide last month shortly after her husband was arrested and just before she was scheduled to speak to investigators in Israel.
Israeli newspapers reported that she survived her overdose attempt and was expected to recover.
She, too, was involved in a New York real estate transaction. Suky and Debora Rivka Pinto were sued earlier this year by the Bank of New York after allegedly defaulting on a loan at an apartment that they jointly owned at the Cielo, a 27-story luxury condo at 450 East 83rd Street.
They allegedly defaulted on more than $5,000 in monthly payments starting in June 2011, after previously defaulting on more than $17,000 in common charges. Sources familiar with the property say the apartment was being rented out to a tenant.
It remains unclear what the longterm impact of the latest arrest will be on the Pinto family. Sources familiar with Pinto say the rabbi is a victim of people trying to take advantage of his considerable influence. Others see a cloud hanging over everyone connected to him.