The Real Deal Chicago

Rabbi bilked investors out of millions in nursing home deals, suit says

Rabbi Zvi Feiner allegedly used his Skokie-based firm to buy and sell properties, pocketing the proceeds
By John O’Brien |
Research by Haru Coryne
May 17, 2018 12:00PM

Some of Feiner Investment properties

A group of investors is suing a rabbi behind a Skokie-based investment firm who they say stole more than $20 million in a series of nursing home and retirement home deals.

Dmitry Godin and Ilya Shulman claim they invested some $15.5 million with Rabbi Zvi Feiner, who is head of the Feiner Investment Corporation, and never were repaid, according to the lawsuit they filed this month in Cook County court.

Feiner is the rabbi of Bais Medrash Binyan Olam, an Orthodox Jewish congregation in Skokie. The suit alleges Godin and Shulman are owed a total of more than $24 million counting interest due on their initial contributions. Godin was founder and CEO of InterFirst Mortgage, a Lincolnshire home lender that closed last year, according to Crain’s.

Their complaint follows a similar lawsuit filed in September in federal court in Chicago that alleges violations of the RICO act by Feiner and co-defendant Erez Baver. In that suit, Feiner created a series of LLCs to buy and sell nursing homes and retirement homes across the country, including several in the Chicago area and one in Wayne, New Jersey, according to the plaintiffs’ attorney, Craig Tobin.

Starting in 2012, according to the RICO suit, Feiner began soliciting investors for the deals, using his standing in Chicago’s Jewish community to do so. He promised returns of anywhere from 12 to 18 percent.

Over the next few years, entities controlled by Feiner began buying properties around the country using investors’ money.

But then he and Baver, the operating officer of one of the LLCs, began selling off the properties or refinancing them, keeping the proceeds for themselves and not giving any to the investors, the suit says. In fact, they never told the investors the properties had been sold or refinanced, which wasn’t discovered until last year, the RICO suit says.

It alleges Feiner also promised investors and lenders stakes in property that were already collateralized with others. In some cases, Feiner gave investors regular disbursements to ease their suspicions, but when those payments stopped the investors became suspicious.

The deals included properties around the Chicago suburbs in Norridge, South Holland and Morris, along with one Downstate, one in Indiana and the New Jersey facility.

The scheme victimized “a 90-year-old Holocaust survivor, school teachers and sophisticated banking institutions,” the suit says.

The federal lawsuit seeks more than $20 million in damages.

Feiner’s attorneys did not immediately respond to a request for comment.

Calls to a number of entities linked to him went unanswered or had disconnected numbers. One of the partners Feiner Investment Corporation lists on its website, Weiss Properties, said he is no longer affiliated with their company. The website says Feiner Investment Corporation “represents a national group of investors, based in Chicago, seeking quality real estate assets in select markets.” It says its principal investors “have been involved in acquiring and developing commercial, industrial and healthcare real estate for more than three decades, and currently own a real estate portfolio valued at well over $1 billion, with properties in Illinois, Maryland, New Jersey, New York, Indiana, Ohio and Washington.” It lists properties in the Chicago area in Tinley Park, Lincolnwood, Wheeling, Skokie and Chicago’s South Loop.

In 2007, Feiner was appointed to the board of a special taxing district on Chicago’s North Side by then-Mayor Richard M. Daley. Last year, he was among a group of officials sued over the 2015 demise of Chicago fintech startup SoVesTech, according to Crain’s. Formerly known as Ditto Holdings, it produced a mobile app that allowed investors to mimic the moves of their favorite traders. Feiner had been a board member for the company, but said in court filings all of the events that led to the lawsuit happened before he joined Ditto.