First trial scheduled for May 18: JECs ex-officials still seek car donations

The S.F.-based Jewish Educational Center may be bankrupt but the controversial charity's legacy lives on.

Several months after the JEC fell under government scrutiny for its used-car operations, at least one new JEC incarnation — and perhaps another — is soliciting used cars in Los Angeles.

Meanwhile, JEC's bankruptcy proceedings have moved ahead with court-appointed trustee Stuart Kaplan filing a lawsuit to confiscate and sell the home of Rabbi Bentzion and Mattie Pil, the founders and former top officials of JEC.

Kaplan also is tracking down other property and real estate to help pay off the charity's debts.

More than 100 creditors are owed a total of at least $1 million.

The JEC case began unfolding in mid-June when the state Attorney General's Office and the San Francisco District Attorney's Office filed separate civil actions against the JEC.

The charges included false advertising, fraud, tax evasion, diversion of funds and unfair business practices. The Pils are accused of using at least $100,000 of the charity's funds to buy their San Francisco home and to pay for their son's bar mitzvah.

The city also accused the JEC of illegal car repairs that led to a November 1996 fire and more than $1 million in damages to a city-owned pier. The city is seeking that money.

The district attorney's case is now set to go to trial May 18 in San Francisco Superior Court. The attorney general's case is scheduled for trial there Nov. 9.

The Pils have long denied any wrongdoing.

The couple, whose charity once brought in millions of dollars worth of used cars in the San Francisco, Los Angeles and New York areas, lost control of the JEC this summer.

An injunction prohibits them from soliciting funds for JEC or any other public-benefit nonprofit.

The U.S. Attorney's Office and the IRS also are investigating the charity and its former leaders on suspicion of wire fraud, mail fraud and money laundering.

And in July, creditors of the suddenly cash-poor JEC filed an involuntary petition for Chapter 11 bankruptcy. That status enabled the nonprofit to try to reorganize and pay off its debts.

As a legal detail, the bankruptcy will be officially converted to a Chapter 7, or liquidation, in early 1998. The JEC no longer performs any charitable work and will exist only until its assets are sold off. Reorganization at this point is "unrealistic and unfeasible," Kaplan said.

In the end, he added, the revenues from selling off JEC assets probably will translate into almost nothing for creditors.

"They will receive little payment if any," Kaplan acknowledged last week. "Many of the assets were illusory…not to my surprise."

Since summertime, the public action and uproar about JEC have died down. But the behind-the-scenes action has not ended.

This fall, a handful of JEC supporters and ex-officials have begun running the Schneerson Russian Jewish Center, a JEC sister nonprofit that previously existed only on paper. The Schneerson center was not included in the court injunction.

Since then, a confusing array of name changes and circumstances has taken place.

The Schneerson Russian Jewish Center is now called the Jewish Foundation for Learning (JFL). The Schneerson Hebrew Day School, which was previously run by the JEC, reopened as the Schneerson Day School under the auspices of the JFL. Over the fall, the school's name was changed to Torah Day School.

JEC was incorporated as a public-benefit nonprofit, which means it must report its financial dealings to the state annually. But the Jewish Foundation for Learning is a religious nonprofit, which "can operate without scrutiny," said Belinda Johns, the deputy attorney general in charge of the JEC case.

Though the Pils aren't JFL board members, they have continued working actively with that nonprofit and the school.

None of the major players — neither the Pils nor JFL's known board members Svetlana Soukhinina and Stuart Burchard — returned phone calls. Carol Ruth Silver, JFL's board president, was unavailable for comment.

But others helped paint a picture of what has happened since fall began.

The day school, the last remnant of JEC's charitable operations, started the academic year in mid-September in rented space at San Francisco's Congregation Ner Tamid. It began with six teachers, including Mattie Pil as head teacher, and about 35 students. That's in contrast to an enrollment of 140 in the previous year.

Jack George, who was Torah Day School's administrator-principal when the academic year started, said last week that the school opened with the help of a $75,000 advance from the Anaheim-based Pick Your Parts Auto Wrecking.

Pick Your Parts agreed to pay the nonprofit $130 for each donated car, he said. But first the advance needed to be paid off. As the money began running out, George said teachers began to be laid off and his hours were cut back to part time in October.

George said he was finally laid off in mid-November, along with the remaining staff who were asked to return as volunteers.

"Unfortunately, things kind of fell apart," said George, who is now living in the Central Valley town of Twain Harte.

When he left, the school still had 28 students in preschool through fifth grade.

At first, George said, JFL wasn't bringing in many cars. "I believe they're doing pretty well now," he said.

George had heard about the Pils' recent involvement in another group accepting donated cars, called the Children's Educational Center (CEC). But he knew little about it.

"It just blows my mind how they can be under all these court proceedings and can just turn around and do what they're in trouble for doing," George said.

Meanwhile, the Jewish Foundation for Learning has been advertising for used cars in the Los Angeles area on the radio and in at least one newspaper, the Los Angeles Times.

Cindi Galfin, the executive vice president of We Care Donations based in Anaheim, said the JFL started working with her firm in September and began soliciting cars in October.

We Care Donations helps charities manage used-car donation programs and works closely with Pick Your Parts, the firm that advanced the $75,000 to Torah Day School

At the same time, the Children's Educational Center has been advertising for cars in Los Angeles.

Mike Masterson, general sales manager at KNX News Radio in Los Angeles, said that Children's Educational Center was soliciting car donations three or four times a day during December.

The person who has been organizing the ad campaign is Bentzion Pil, Masterson said.

JEC owes the CBS affiliate money, an amount that Masterson called "very minor" and less than five figures.

"Because of the past problems, we're taking cash in advance," he added.

At least one other Los Angeles-area radio station, KFI, also confirmed it has been running ads for Children's Educational Center.

There is apparently a relationship between the Jewish Foundation for Learning and the Children's Educational Center.

On Monday, the separate 800 numbers for the two groups were answered by the same operator based in San Francisco. She described both groups as religious nonprofits with tax identification numbers.

JFL provides scholarships for children at the Torah Day School in San Francisco and teaches English to emigres, the operator said. She described the CEC as operating a children's camping program in Los Angeles and helping children with mental and physical handicaps.

A request for more information from Children's Educational Center's officials was not answered.

No entity called Children's Educational Center is listed in Los Angeles, according to directory assistance.

According to the Internal Revenue Service and the Attorney General's Office, no group called Children's Educational Center is officially listed on their registries. A group with a similar name, Children's Education Center of Claremont, is listed. But a founder of that nonprofit, which supports a nursery school at Claremont College, said he has never heard of Bentzion Pil and isn't advertising anywhere.

Meanwhile, the legal maneuverings are moving along.

One of the more significant legal events of the fall was Kaplan's decision to file the lawsuit in late November trying to gain possession of the Pils' home in San Francisco's Richmond District.

"We are certain some JEC funds went into the purchase of the house," said Malcolm Leader-Picone, an attorney for Kaplan.

The state's civil suit filed this summer alleged that the Pils transferred funds to third parties who gave it to Mattie Pil's brother, who then used the money to help buy the house for $472,000 in August 1995.

Mattie Pil's brother, Levi Plotkin, deeded the home to the Pils in August 1996.

As a result of that allegation of fund diversion, Leader-Picone said, the trustee is obliged by law to try to recover the house and sell it to help pay off debts.

But David Schwartz, an attorney for Bentzion Pil, said the trustee is wrong about the source of the money for the Pils' home.

"What I believe he is basing that on is a partial review of some accounting records by the Attorney General's Office…When we get all the accounting records, we will be able to demonstrate clearly that JEC money did not go into the house," Schwartz said.

"They're still in the house, and they intend to stay in the house."

Kaplan is also considering whether to take legal action over a Torah scroll that Bentzion Pil allegedly has in his possession. Kaplan is investigating whether the Torah, which may be worth about $40,000, is part of JEC's property.

Other property is also tied up in the courts.

This fall, federal bankruptcy Judge Dennis Montali gave Kaplan the approval to sell a building at 311-11th Ave. in San Francisco. The $920,000 sale is now in escrow.

In October 1996, JEC purchased the building for $900,000 and then deeded it to the Schneerson Russian Jewish Center. The building, which has a linen store downstairs and apartments upstairs, was supposed to become a synagogue in the future.

Kaplan alleges that JEC improperly transferred the building to the Schneerson center. He claims the building belongs to JEC.

The Jewish Foundation for Learning claims that it owns the building.

In reaction, the JFL and Soukhinina, one of its board members, filed a lawsuit in U.S. District Court in November. That suit seeks to prevent Kaplan from selling the 11th Avenue building, claiming he is violating their freedom of religion.

The lawsuit argues that the building was "informally dedicated as a synagogue…Under Jewish law, this act of dedicating the building for use as a synagogue had the effect of sanctifying the premise."

The building, however, has never yet been used as a synagogue. And Leader-Picone denied that Kaplan's challenge of the building's ownership violates anyone's religious rights.

A federal judge rejected the JFL's request for a temporary restraining order against Kaplan.

In regard to other donated property, Montali approved the auction of tens of thousands of dollars worth of merchandise at Butterfield & Butterfield in San Francisco. Those items include costume jewelry, diamond rings, clocks, oil paintings, mink coats, a car phone and musical instruments.

At the same time, another attorney is working with Kaplan to sell off 40 to 50 pieces of real estate donated to the JEC.

The real estate is mostly undeveloped land in remote areas of California and the East Coast, said Dean Pasvankias, an attorney for Kaplan.

"Quite a few of them will not have value or will have minimal value," he said, adding that he was surprised the charity even accepted them.

"It's not an asset-rich case," he said.