Shmuel Shmueli, Serial Conman and Fraudster

Shmuel Shmueli

Part II of a series where I am the journalist covering a federal investigation in which I am also the investigation’s target. A companion series about the Bronfman sisters and cult leader Keith Raniere are also in this issue. Both are connected to the federal investigation. The series on Shmuel Shmeili details how he defrauded more than two dozen lawyers in Buffalo and elsewhere.

The man who ripped off eminent lawyers such as Joseph Zdarsky, Steven Cohen, Corey Hogan, John LaFalce, Eric Bloom, William Savino, Mitchel Banas, Joseph Mazurek, Phil Abromowicz, David Kloss, Michael Paskowitz, as well as the law firms of Jaeckle, Fleischmann & Mugel, Damon Morey, and others must not be considered lightly.

Where did he come from?

Born in Israel; Shmuel Shmueli is 64. He claims to be a devout and practicing Orthodox Jew who observes the Sabbath and will not eat anything other than Kosher food.
For Shmeuili charity doesn’t begin at home, charity is a home. On Dec. 10, 1979, Shmueli bougt a lovely, 2,700 square foot family home at 933 E. 17th St in Brooklyn and moved in with his wife and small children. Over the years, his wife gave birth to more children and they were raised in the Shmueli Brooklyn home.

Being creative, Shmueli placed three mortgages on the property: Dime Savings Bank, Bank Leumi Trust, an Israeli bank, and a fourth mortgage from the seller, Andrew James.

Two years later, on June 24, http://southbuffalonews.com98http://southbuffalonews.com, he transferred the home to his wife, Zvia, who later got a $http://southbuffalonews.comhttp://southbuffalonews.com0,000 mortgage from Citi Bank.

On Feb. http://southbuffalonews.com0, http://southbuffalonews.com989, she transferred title back to Shmueli, who, in turn, got a mortgage from Sol Orbuch for $75,000.

On Feb. http://southbuffalonews.com3, http://southbuffalonews.com992, Shmueli transferred the home back to his wife.

One month later, Zvia transferred the home to their 27-year-old daughter, Batya Shmueli.

On Feb. 29, http://southbuffalonews.com996, Batya got a $328,000 mortgage from Brucha Mortgage Bankers Corp. of Staten Island.

Then in April, http://southbuffalonews.com999, Batya signed a contract to sell the family home to Jacob and Eva Fuhrman for $480,000.

The Fuhrman’s closed on Aug. 26, http://southbuffalonews.com999 expecting to move in and enjoy the same happy hearth and home the Shmueli’s enjoyed for 20 years.

After closing, however, Shmueli declined to let the Fuhrman’s move in, and produced a lease, signed by his daughter, Batya, that leased the home to Shmueli.

He declared he would stay and pay rent.

The Fuhrmans filed suit in the US District Court for the Eastern District of New York to eject Shmueli from the house.

Shmueli, representing himself, filed a countersuit, a motion to dismiss, and asked to postpone the hearing since, he said, he had business in Israel.

He also asked the judge to restrict the new owners from entering the house “for any reason at any time” while he was in Israel and asked that all mail from the court be sent to his address: P.O. Box 607, Bnai Brak, Israel.

Magistrate-Judge Joan M. Azrack disagreed and issued a Report & Recommendation to Judge Carol B. Amon that Shmueli be ordered to vacate the premises, and, if he did not, the “U.S. Marshals shall be authorized to execute the order to vacate, using whatever force is reasonably necessary”.

Shmueli objected but, curiously, his daughter, Batya wrote to Judge Amon that she had no objection to the court evicting her father.
At some point, during a hearing or conference, Shmueli admitted he did not tell Fuhrmans of the lease until after closing and on Nov. 23, http://southbuffalonews.com999, Judge Amon granted summary judgment to the Furhmans ordering Shmueli to vacate by Dec. http://southbuffalonews.com3, http://southbuffalonews.com999.

Yet Shmueli did not move out. The Court directed the U.S. Marshall to eject him. And on June 22, 2000, the Judge ordered that the Clerk of Court enter “judgment against defendant Shmuel Shmueli in favor of plaintiffs in the amount of $56,668.8http://southbuffalonews.com, comprising $4http://southbuffalonews.com,668.8http://southbuffalonews.com in actual and consequential damages and costs and $http://southbuffalonews.com5,000 in punitive damages.”

Shmueli however was never to pay the judgment since he discharged the debt, along with $24.5 million in other debts, in bankruptcy on Aug. 23, 2002.

On his bankruptcy petition, when asked if any “books of account or records” were missing, Shmueli declared, “records were lost during eviction action without my presence, court ordered.”

One of the last entries of record in the Fuhrman matter is dated June 2, 2000. It concerns mail “addressed to: Shmuel Shmueli, P.O. Box 607, Bnai Brak, Israel. Returned with notations: Insufficient Address.”

If Shmueli’s handling of matters concerning his home was a little erratic, the man who swindled top attorneys gets high marks for business practices.

Shmueli was publisher, editor and owner of Israel Shelanu. It was published in Brooklyn and on Aug. 20, http://southbuffalonews.com987, The Los Angeles Times wrote that it has a “worldwide circulation of http://southbuffalonews.com20,000, is the only Hebrew newspaper in the world published outside the Jewish state,” and “offers news about Israel and the Jewish world culled, for the most part, from the Israeli press.”

But, despite the good press, on Dec. 4, http://southbuffalonews.com987, some of his employees sought the court’s help through an Involuntary Petition for relief under Chapter 7 of the Bankruptcy Code.

Dr. Yossi Gamzu, editor, claimed he worked for 4½ months and was owed $http://southbuffalonews.comhttp://southbuffalonews.com,250 in wages and presented a letter from the newspaper stating he was employed at an annual salary of $36,000 per year.

Shmueli contested Dr. Gamzu arguing he was unpaid since his immigration status as an Israeli citizen would not allow Shmueli to pay him and that Shmueli’s letter reciting Gamzu’s employment was written to deceive US Immigration authorities who would be more likely to issue Gamzu a “Green Card,” if they believed he had gainful employment.

The other employees he argued were time barred or that he owed the money personally and a debtor corporation is not liable for an officer’s personal debts.

Boaz Gabbai claimed he accepted employment as a graphic designer for less than $5 an hour, rather than his customary $25 an hour, with a verbal agreement that Shmueli would sponsor his “Green Card” application.

When the time came, Gabbai claimed, Shmueli refused to sponsor his Green Card application unless Gabbai paid him $25,000.

In any event, on Jan. http://southbuffalonews.com9, http://southbuffalonews.com988, Chief Judge Conrad B. Duberstein noted, “if there is a bona fide dispute as to either the law or the facts, then the creditor does not qualify and the petition must be dismissed.”

The petition was dismissed.

But hard luck followed.

Other employees won claims such as a $http://southbuffalonews.com00,000 judgment against Shmueli in favor of former editor Uri Lehavi and another editor, Noam Niv made a $20,000 claim.

As one of his writers, Yori Yanover, said, “Shmueli …. bounced checks like he was one of the five openers of the Harlem Globe Trotters.”

It was not just employees that Shmueli did not pay, but companies and individuals in America and Israel.

Printers, landlords, friends in Israel, Banks all got judgments.

While Shmueli’s course of study of the deeper meaning of the Jewish religion was fruitful spiritually, it was not so much financially.

The Wisconsin Institute of Torah Study, Milwaukee, WI., made a claim of $3,http://southbuffalonews.com28 against him.

Verizon, Mid Atlantic Graphics, and Sprint rounded out the list of creditors.

And as if that wasn’t bad luck enough — Shmueli’s newspaper came to a screeching halt on April, 22, http://southbuffalonews.com998, when a lawsuit was brought against him for copyright infringement, filed in the United States District Court for the Southern District of New York, by Haaretz Daily Newspapers, Ltd., founded http://southbuffalonews.com9http://southbuffalonews.com9, and Maariv Modiin Publishing Co., Ltd., founded http://southbuffalonews.com948. They were joined by the Publication Group, Inc., d.b.a. Shalom, a Los Angeles-based newspaper.

On May http://southbuffalonews.com8, http://southbuffalonews.com998, Federal Judge John G. Koeltl issued a preliminary injunction ordering Shmueli to stop copying or reprinting materials from the newspapers.

This crippled Shmueli’s newspaper model since as he could no longer take the other newspapers’ work for free.

In June, Shmueli retained Moskowitz & Book of NYC to represent him. Within a month, the firm applied for and were granted leave to withdraw as his attorneys.

Shmueli served a verified answer through Andrew Paul Cooper Esq. By January http://southbuffalonews.com999, Cooper was granted leave to withdraw. (Cooper claimed $http://southbuffalonews.com2,000 in unpaid legal fees.).

In April, Magistrate Judge Francis denied Shmueli’s application to file a counterclaim since discovery was supposed to have been completed four months earlier.

Shmueli retained Jon Lefkowitz to represent him and on June 30, http://southbuffalonews.com999, after being denied the right to bring a counter claim in the Haaretz lawsuit, Shmueli brought a separate action (Shmuel Shmueli, Bashe, Inc. v. Lowenfeld) in the US District Court for the Eastern District of New York – against the same plaintiffs in the Southern District action: Haaretz, Maariv Modiin and the Publication Group, Inc., as well as their lawyers, seeking $http://southbuffalonews.com58 million in damages alleging unjust enrichment, detrimental reliance, breach of contract, antitrust and RICO violations, abuse of process, malicious prosecution, tortious interference with contract, fraud, conversion, breach of contract, civil racketeering and antitrust violations.

On Sept. http://southbuffalonews.com7, http://southbuffalonews.com999, Judge I. Leo Glasser dismissed Shmueli’s suit ruling that Shmueli’s “objective in bringing the duplicative action was to circumvent the prior order of the original court” which prevented him from asserting counter claims.

This ruling has been cited in other, unrelated cases, often with this quote: “Having failed, for whatever reason, to assert their counterclaims in one action, plaintiffs may not institute a second action in which those counterclaims become the basis of the complaint.”

Finally on Dec. http://southbuffalonews.com, http://southbuffalonews.com999, the US Court Southern District – in the original copyright infringement case concluded with judgments entered against Shmueli: Maariv Moddin Publishing Co. LTD NY and Israel – $http://southbuffalonews.com2 million, Haaretz Daily Newspapers LTD NY and Tel Aviv, $6 million, Publication Group NY – $6 million and Shalom LA, Encino CA – $6 million.

Unhappily after losing his home and his newspaper (and his wife) happily for Shmueli he was not to pay a dime of this or any other debt.

On Jan. 7, 2002, Shmueli filed a petition for voluntary bankruptcy in the US Bankruptcy Court, Eastern District of New York, seeking to discharge $24,50http://southbuffalonews.com,978 in debt.

He declared $2,050 in assets.

In his petition, Shmueli claimed he was living on $http://southbuffalonews.com325 a month and most of that was from charity.

He was not to live on charity for long, however.

He would relocate to Western New York and live off of fraud, starting with defrauding this writer and an assemblage of local attorneys.

 

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