Rabbi’s Ponzi scheme bilked investors of $35M on nursing home deals, suit claims

Rabbi Zvi Feiner is facing another round of legal trouble related to an alleged nursing home investment scheme

Nov.November 12, 2018 11:00 AM

Some of Feiner Investment properties

A north suburban rabbi is again facing legal trouble after another family says they invested in his development company and were never repaid.

Rabbi Zvi Feiner, who is head of the Feiner Investment Corporation, previously was accused of defrauding neighbors and congregants out of at least $35 million they invested in his property acquisitions, according to court documents.

He is accused of using his standing as the rabbi of an Orthodox Jewish congregation in Skokie to entice investors on deals he used to line his pockets, according to lawsuits filed against Feiner. His victims include a 90-year-old holocaust survivor and a group of Jewish day school teachers that lost their life savings in the scheme, according to the suit.

After setting a previous case alleging $20 million in investor fraud, Feiner is now facing another lawsuit that claims he bilked a family out of more than $2 million he used to buy nursing homes and other facilities across the country.

The Cohen family of Chicago sued Feiner in federal court Nov. 2, claiming their investments in Feiner’s company never saw the returns he promised. Instead, the money was used in fraudulent schemes for the sole benefit of Feiner, the lawsuit claims.

In 2011, Feiner approached Ari Cohen about investing in a nursing home facility in Downstate Decatur. The family invested $300,000 with Feiner to buy the property.

The various lawsuits against Feiner, including the Cohens’, claimed he would start making regular disbursements to his investors, but then quickly stop.

In this case, Feiner told his investors the Decatur nursing home’s operator was not paying rent, and so he was forced to turn the property over to the lender, the suit claims.

But a local news report suggested Feiner stopped pay the bills for the facility, and that caused the facility operator to close its doors. While the nursing home was open, Feiner borrowed from the facility and never paid it back, according to the suit.

The family also invested with Feiner on a deal to buy a South Holland senior citizens home, according to the lawsuit. Feiner used two LLCs to acquire the property, and put the more valuable skilled nursing facility in an LLC controlled only by him, the lawsuit claims.

Not only did Feiner loan himself money from the facility, he sold the property in 2016 and netted $3.6 million in profits that he did not share with investors, the suit claims. When the investors found out about the sale in 2017, Feiner lied and said the lender had taken the sales proceeds to reduce the loan balance, according to the suit.

Feiner could not immediately be reached for comment.

The Cohen family invested in at least five buildings with Feiner that involved similar fraud schemes, the lawsuit alleges. The family is asking a federal judge to force Feiner to repay their $2.1 million initial investment, plus $10 million in punitive damages.

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