Jerusalem, December 30, 2021
The Jerusalem neighborhood of Talbieh, viewed from the Old City of Jerusalem. The Inbal Hotel, the subject of the botched lease deal, can be seen in the foreground. Photo: timesofisrael.com
A Jerusalem court has ordered the Jerusalem Patriarchate to pay millions to a Jewish fund to compensate for the theft of convicted Jewish fraudsters 20 years ago.
And this despite the fact that the Patriarchate itself was also deceived, never receiving a single penny, reports the Times of Israel.
The Church was ordered to pay $13 million plus $80,000 in costs to the KKL-JNF Jewish National Fund, although the fraudsters Yaakov Rabinowitz and David Morgernstern have already been convicted of their crime and were also ordered by in the same ruling to repay the $20 million.
A private company, Nayot Komemiyut Investments, is responsible for paying the Church’s bill, as per an agreement it signed with the Church a few years ago to acquire the land involved in the relevant bungled lease deal.
The Times of Israel explains the history behind the deal:
The story dates back to 1951 and 1952, when the Greek Orthodox Church signed three contracts to lease the Talbieh-Nayot land in Jerusalem to the KKL for 99 years.
Those contracts give the KKL the right to extend the leases when they run out in 2050 and 2051 — in the case of one contract for a further 49 years, and in the case of the other two, for periods to be negotiated. The agreements also spell out the mechanisms for pricing those lease extensions.
As houses and apartment buildings were built on the land, the KKL, as leaseholder, subleased individual plots to house and apartment owners, using contracts that clearly stated when the leases would expire.
In 2000, the KKL agreed to enter into a process to extend the leases beyond the 2050s, but were conned into parting with $20 million by two criminals, Yaakov Rabinowitz and David Morgenstern, both later jailed, who promised to get the church to agree to extend the leases for that price. The two managed to persuade the aging patriarch at the time, Diodoros, to sign a contract by telling him, while he was on his sickbed, that he was signing an Easter card…
Once the ruse was exposed, a criminal court ruled that the lease extension deal had to be canceled because it was put together illegally, and the KKL set about trying to get its money back from the church.
Globes Israel Business News provides different details, reporting in 2017 that the signature of Patriarch Diodoros was, in fact, revealed to be a complete forgery.
The KKL and Nayot Komemiyut Investments have different explanations for why a legal lease extension was never reached in the years following the fraud conviction.
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