More Bad News For Kabbalywood Inc.

More bad news for Kabbalah Centre Inc. as the IRS,  grand jury, and lawsuits pile-up.  Perhaps they need to just pour Kabbalah water on the tax files, and wrap the building in red string to ward off all the negative energy?

A former CFO told the NY Daily News, “I recently uncovered instances of income tax fraud . . . instances which could bankrupt several of the directors involved,” wrote former Chief Financial Officer Nicholas Vakkur in an August 2010 email obtained by the Los Angeles Times.”

My recent posts on the current troubles of the Centre having to do with Raising Malawi  have attracted attacks by rabid supporters who ascribe powers to leader Phillip Berg akin to the Baal Shem Tov, Moshe Chaim Luzatto, and Chaim Vital. The devotees conveniently ignore the investigative work done by journalists in Israel, England and the US that uncover many bogus claims made by the Center, the lives that have been ruined, marriages split up.

By claiming that Kaballah is the world’s leading source of truth and attracting mega-celebrity devotees, ironically, the Bergs have contributed to the popularity of Jewish mysticism more than any other family. They might also bring Jewish mysticism its greatest disgrace. Or that might be left up to Madonna herself.

LOS ANGELES (AP) – The Kabbalah Centre, a proponent of Jewish mysticism that attracted Madonna and other celebrities, said Friday that it will cooperate with a government tax investigation.

The nonprofit Los Angeles-based center and one of its charities, Spirituality for Kids, received government subpoenas concerning “tax-related issues,” the center said in a statement.

It will cooperate and intends to work closely with the Internal Revenue Service, the statement said.

A federal grand jury in New York also is investigating the center, according to subpoenas cited by the Los Angeles Times.

Madonna chaired the board of Spirituality for Kids and donated more than $600,000 to the cause, according to tax filings cited by the Times. However, subpoenas do not indicate that she personally is under scrutiny, the newspaper said.

However, one of the singer’s charities, Raising Malawi, is under grand jury investigation even though it cut ties to the Kabbalah Centre this spring.

“We have tried to provide as much information as we can as quickly as possible to the people who are investigating and are very actively cooperating in every way we can,” Trevor Neilson of Global Philanthropy Group, the charity’s manager, told the Times.

The Kabbalah Centre has been controlled by the Berg family for more than 40 years. It has grown into an international organization that has drawn celebrities such as Ashton Kutcher and Gwyneth Paltrow and may have assets of $260 million.

The federal investigation follows several court actions involving the center’s finances. A trustee sorting out a $68 million fraud scheme in a New York bankruptcy court has demanded that the center return $2.9 million it received as an investor.

Heiress Courtenay Geddes filed two lawsuits against the center earlier this year. One claims that the Bergs and others connected to the center defrauded her of about $1.3 million. The other alleges that she contributed $500,000 for a homeschooling program that never was created.

Her attorney argued in February that the center

and its related organizations “exist primarily to enrich” the Berg family.

The Kabbalah Centre has called the lawsuits meritless.

The center is run by Chief Executive Karen Berg, 68, with the help of sons Michael Berg, 37, and Yehuda Berg, 38, the Times said. Karen Berg’s husband, Philip Berg, 81, became the head rabbi in 1969 but suffered a debilitating stroke in 2004.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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