Deal, NJ – Solomon Dwek’s real estate dealings left him accused of owing some $338 million to more than 80 banks, companies and former business partners. His hidden wire last month helped the FBI take down 44 politicians, rabbis and others.
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But the latest casualty in the story of the disgraced mogul turned FBI informant may be more personal: the yeshiva his parents founded more than 20 years ago.
The court-appointed trustee of Dwek’s bankruptcy case has filed suit against Deal Yeshiva, accusing the school of helping Dwek to perpetrate a Ponzi scheme by allowing him to funnel $13 million through two yeshiva bank accounts. The trustee is demanding the yeshiva return the money.
Meanwhile, teachers at the school that five years ago reported nearly $10 million in income now say Deal Yeshiva owes them up to six months worth of salary.
Rabbi Isaac Dwek, the founder of the yeshiva, declined to comment for this story other than to deny teachers’ reports that the boys’ high school division will not reopen in September.
“All educational institutions are continuing,” was all the senior Dwek would say.
A private Sephardic Jewish school for students in preschool through grade 12, Deal Yeshiva maintains a girls’ division in West Long Branch and a boys’ division in Ocean Township. As of 2006, the most recent year for which public records were readily available, Deal Yeshiva had 348 students.
Solomon Dwek served as vice president of the school from 1997 until 2006, when he resigned after he was arrested by the FBI on charges of committing $50 million in bank fraud. And while he was vice president, the yeshiva allowed him to “improperly utilize” two of its bank accounts, according to a lawsuit filed February in federal bankruptcy court by Charles A. Stanziale, the trustee of Dwek’s bankruptcy case.
The suit described Dwek’s alleged Ponzi scheme, under which he took investment funds from people and companies in exchange for a promise of a guaranteed return. He claimed to use the money to purchase real estate but instead spent most of it to repay previous investors their original investment plus “significant fictitious profits,” according to the suit.
Large portions of the fraudulently obtained funds were transferred to various religious organizations, including Deal Yeshiva, the suit charged. Dwek transferred $13,069,600 between February 2003 and February 2007 to two Deal Yeshiva bank accounts that had no specified purpose — one called Payroll Account and the other called Operating Account, according to the suit.
“He put money in; he took money out,” Stanziale said Monday. “He paid a lot of his bills out of there.”
The yeshiva’s direct participation in the Ponzi scheme enabled Dwek to continue to perpetrate the scheme and enabled the yeshiva to benefit at the expense of Dwek’s investors and creditors, according to the suit, which demands the yeshiva return the money so it can be distributed among those investors and creditors.
“You think I’ll ever see that $13 million?” asked Stanziale, who has filed some 125 lawsuits in his quest to “work (his) way out of” Dwek’s complex bankruptcy case.
At the same time, the state Labor Department is investigating whether Deal Yeshiva is behind on its payroll, confirmed Kevin Smith, department spokesman. Some teachers said they had not been paid since December — and they blamed Dwek’s financial woes for the school’s problems.
Louis Zimmerman, who has taught physical education at the boys’ high school since 2001, is one of those teachers.
“I’m having trouble paying my bills,” said the 49-year-old father of three. “I don’t know where my next mortgage payment is coming from.”
Mark Winter, a history and English teacher, said he had not received a paycheck since February.
“My only question to them is, how and when am I getting paid?” asked Winter, 60. Stanziale, the bankruptcy trustee, said he was aware Deal Yeshiva teachers had not been paid and he had been told the school was struggling to remain open.
Still, Stanziale said, he must proceed with the lawsuit against the yeshiva, even though it “serves the right purpose.”
“I have a responsibility to try to recover those funds that may not have been legitimate,” the trustee said. “It was monies that may have rightfully belonged to (Dwek’s) creditors or investors.”
From this story and other investigative reports in local papers, it appears likely that the yeshiva was a participant in Dwek’s scams and thefts. Thus, the bankruptcy Trustee is legally obligated to try and get back every dollar he can for creditors, even it means shutting down the yeshiva and taking every dollar it has in its bank accounts. There are plenty of other yeshivot in New Jersey so its not the end of the world if Deal yeshiva were to close. The real victims would be the faculty and staff who might never see the money the yeshiva owes them s
Bashefer, have mercy on us.it seems this story will get worse before it gets any better, gevald!
If the guy would have some sechel, he would not persue it. The yeshiva is broke and he will never see a penny out of it. He is wasting taxpayers money whill filling his own coffers.
So what I see here basically a shocking picture, this disgraced Dwek was himself a money launderer, and then went out on a wild hunt to pull some other innocent people into his “familiar” trade, and have them locked up.
In fact he is the big launderer.
not only a moser, a money washer also.
He should deserve a m…. mshine this dwek what problems he made up in klal yisruel
It is obvious that the yeshiva was evolved with the crook in laundering money, you reap what the saw. This should be a lesson to all orthodox Jewry, not to get involved with any illegal scams.
What makes you think anyone in the Yeshiva was involved? He was the VP and was able to do whatever he wanted in the Yeshiva’s name without anyone from the Yeshivas assistance. Please give his suffering family the benefit of the doubt that he acted completely alone in all his dealings.
Its a sad old story-allegedly ehrlicher Yidden operating an apparently legit business, making it seem like it was financially healthy, only to later pillage it and leave employees and creditors out in the cold. My brother went through this exact situation 25 years ago when he worked for a business in Boro Park. Everything was going great until one day, customers started to complain that they hadn’t received the goods they had paid for, vendors complained they hadn’t been paid. My brother found out that the owner pulled every last dollar the business had out of the bank and fled to Israel. The business quickly closed and the employees last paychecks all bounced.
The boys school was taken over bu keter torah in lakewood and the parents can decide to stay or seek education elsewhere. I assure you most will stay it’s the on charedi elementary school in the neighborhood..However the girls division was handed over to a local community rabbi and he is looking to rent out the WLB location and seek smaller accomodations. Regardless the Yeshivot are not closing down…they are moving on…just without the Dweks.
look want he did to his prents and siblings and wife and kids. if he stillhas awife. did she divorce him. woldm\ not blame her at all
her divorce is REALLY no bodys concern and or buisines
I’m only asking the question so please don’t come hard on me, and that is there are so many wealthy syrians in Deal why can’t they step up to the plate and form a new board etc. and get the school running again after all its their children and their future, anyone ???
I know of a very prominent R”Y zichrono livraca who stressed that any mossad who does not have open books is not worthy of being supported.
That school is a fraud. He did not pay the teachers for 6 months yet this rabbi lived high on the hog all this time. This school should be shut down with the rabbi brought up on charges for not paying his employees.
Let those who flaunt their massive wealth with their merecedes and audis who have 6 pillar homes donate some of money to keep the yeshiva going.
he’s destroyed his soul.
not only a moser, a money washer also.
a large portion of the people that live in deal and do have the means are not very motivated to save deal yeshiva, some of them were very hurt financially as well as emotionally by the whole fiasco with shlomo…as well the hashkafah of deal yeshiva does not necessarily coincide with their own so why support something you don’t beilieve in …and on another note there is no more deal yeshivah the boys were absorbed by keter torah and the girls school is now called bais yaakov of the jersey shore, it’s basically a new school: new hanhalah, new location, new board, same kids.
This rasha told someone recently “I’m going after as many institution as possible,they’re coming down with me”