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MAILBAG: I’m Begging You, Stop Setting Your Money On Fire – Two More Ponzi Schemes Unfolding

It was just a few months back that I penned a letter on YWN warning people of a growing laundry list of financial schemes and scams that have plagued our communities in recent times. From outright thieves to dopey businessmen and their pie-in-the-sky projections, tens of millions of hard-earned dollars have been wiped from the bank accounts of our community members’ bank accounts.

In that original letter, I begged everyone to be mindful of what they were getting into when entering a business deal. Far too many people were ready to hand over their money for the impossible promise of sky-high returns, only to predictably be left emptyhanded – and sometimes destitute – when the deal originator turned out to be a grifter. I hoped that my letter my open some people’s eyes, but alas, it was simply not meant to be.

In recent days, I have been made aware of two Ponzi schemes to the tune of $20,000,000 each that have taken place in Brooklyn and the 5 Towns. And in Lakewood, an additional disaster appears to be unfolding, with investors losing many millions more.

I am truly flabbergasted at what is occurring. I understand if you want to dream big, and I know that we have this concept that open and innovative thinking could bring about spectacular wealth. But can we have a little seichel? Why are we okay with being so openminded that our brains fall out?

The answer, I believe, delves into a far broader issue, in which our communities have become beholden to materialism and the crushing pressure people feel to be viewed as successes. But that’s for a different time. For now, my primary concern is: how have we drifted so far from common sense? התורה חסה על ממונם של ישראל is referring to your money too!

After my first letter, which I now see was published seven months ago, YWN said that they received lots of hate mail. Some readers were incensed that it was willing to “air the dirty laundry.” Well, now that there are three more of these schemes going down, are you still upset? We have community members losing their pants, and you’re worried about perceptions?

But even worse, nobody took the warning to heart. After my letter, multiple Jewish magazines and newspapers ran features about the crisis of people going headfirst into ill-advised investments. Yet despite the deluge of warnings and urgings for people to be more careful, many people have apparently not learned their lesson.

If we want to solve this, it has to come from the top. By that, I mean rabbanim have to be more involved in the finances of their kehilla members. That doesn’t mean the rabbanim should actually be sifting through their bank transactions, but they should be exhorting them to be vigilant. Secondly, we are in desperate need of an organization that can provide free reviews for potential investors, where people can bring this organization – filled with financial professionals – the numbers they were given by the deal leader, and they can then warn the investors of potential pitfalls.

We have organizations for relatively small things, like helping get on a government program that save families several hundred or several thousand dollars; shouldn’t we have an organization that would undoubtedly save people from setting millions of dollars on fire?

Zanvel Gertenowitz

NOTE: The views expressed here are those of the authors and do not necessarily represent or reflect the views of YWN.


(YWN World Headquarters – NYC)

23 Responses

  1. I’m ready to create an organization that would review and certify any deal and any person. Who would want to join in with me?

  2. While I commend the general theme of the letter and the raising of awareness, the idea that there should be an organization to help stop this is laughable. The “small” issues mentioned are to help people who are in need find assistance. The tzibbur is not responsible to pay to manage the finances of wealthy people who are looking to make investments. This is called due diligence and there are plenty of reputable businesses who provide this service. Not everything needs an organization.

  3. Ponzis are terrible but you want rabionim to become forensic accountants.. there is nothing wrong with investing peoples money, it’s not even wrong to lose it …the real problem is the natrual hope to turn things around and the busha of saying things are going sour

  4. Part of the problem is that the criminals are never named. I understand why you’re not identifying the perpetrators but it adds to the problem. The people who lose money also make a major effort to hide the fact that they’re in financial ruin. They have good reasons for that too, primarily shidduchim. When you tell stories about unnamed, imaginary people, no one’s going to take you seriously. If they know the neighbor who built that mansion is a crook and not the upstanding Jew you think he is when you see him in his seat at the mizrach vant, maybe they’ll think twice about their next investment. When it’s a make believe story with no names, they’re convinced they’re too smart to fall into anything dumb like that.

  5. You may very well be right that these scams are going on but I don’t think a general oped like this will educate people. Maybe it’s a warning but you aren’t educating anymore.
    If what your saying is true it might be very worthwhile to write up the type of scams that are going on. This will help people when someone offers them a pie in the sky deal. They will know to recognize the red flags.
    At least when their chavrusa’s brother in law will offer them a once in a lifetime deal they might be equipped with some questions. Otherwise its just another swiping credit cards scam.
    Obviously this can be done with protecting the identities of people involved. But vague warnings like this only serve one person. The one who wishes to say “I told you so “

  6. Was with you all the way until the end.
    Why on earth should this be made into an organization?!? There are professionals who offer audit work as a service, if people are too lazy to use them they risk losing their investment.
    I can just see the Charidy campaign now, “donate now to protect people from their own laziness and greed. It’s mamash sakanas nefashos”

  7. A rav can only opine on what he is invited for.
    Unfortunately a Letz wont see the validity of a Rav opining on matters of financial consideration. It would be construed as overreach, and not helpful in the least.

    Contrary to some of the comments here though, i DO see value in a rabbinically sanctioned community resource focused on business advice. It would be a major chessed, and there are so many wonderful Yidden who would be happy to share their know how.

  8. So perhaps we should start a Go Fund Me campaign to help Reb Zanvel start an organization to deprive these ehrliche scammers of the funds they rely upon for their parnassah. Even if these scammers are arrested and convicted, we can start another Go Fund Me campaign for pidyon shivuim. As repeatedly noted, at some point, you cannot protect yidden from their own stupidity. Today, it takes just a few minutes to perform basic diligence on those offering financial assistance and confirm their legitimacy with any one of multiple online sources.

  9. This is all very fine and well. But maybe someone should take a closer look at the finances of all these big donors who get honored at shul and yeshiva dinners and get “Harbotzas Torah” awards and smile for pictures with the Rav and the yeshiva board while all along they are stealing from fellow Jews.

  10. Let’s talk straight, folks. When it comes to failed business deals, we need to tread carefully and not rush to judgment. Painfully… It’s that season… I did a quick search, and Zanvel Gertenowitz seems to be an enigma, only popping up in this article. It makes you wonder if this whole letter might have a touch of creative storytelling.

    I’ve been a part of our expansive yet insular business community for a solid quarter-century, and I’ve gotta say, we’ve got something special here. We look out for each other, we do business with heart, and we’ve got this chesed thing down to an art form. I’ve seen people succeed, stumble, and rise again, kgalgal hachozer, always driven by good intentions and an unwavering commitment to honesty, ethics and Torah values.

    Now, let’s be real—bad apples do exist, and when we find ’em, we need to act decisively. But let’s not blow this out of proportion; it’s not an epidemic.

    America, as a whole, is grappling with financial woes under the current policies and financial climate. Some of us are taking a beating, me included, but we’re not just any community; we’re resilient. We’ll get through this together, and mark my words, we’ll come out of it stronger and better than ever.

    Remember that no one can take anything from us that Hashem wants us to have, and we can’t take from someone something that is not meant for us.

    And on a cheeky note, a little gashmious reset never hurt anyone. Sometimes, a dash of practicality can spice up our community, making it even more vibrant while preserving our core values.

    Yeah, I also use a pen name, but I’m not throwing punches.

    Byachad N’natzech.
    Let’s bring Moshiach B’karov.

    Here is a Kapitel Tehilim that helps me stay focused on what matters.


    מִזְמ֥וֹר לְדָוִ֑ד. Hashem is my shepherd; I shall not be missing anything. — Hashem has provided until now and will continue, always.

    א מִזְמ֥וֹר לְדָוִ֑ד יְהֹוָ֥ה רֹ֜עִ֗י לֹ֣א אֶחְסָֽר:

    2 He causes me to lie down in green pastures; He leads me beside still waters. — as the master Shepard Hashem leads me on the absolute best path.
    ב בִּנְא֣וֹת דֶּ֖שֶׁא יַרְבִּיצֵ֑נִי עַל־מֵ֖י מְנֻח֣וֹת יְנַֽהֲלֵֽנִי

    3 He restores my Nefesh [daily]; He leads me in paths of righteousness for His name’s sake. — In pursuit of fulfilling of obligations to our families and they needs, we do our duties lishmah, this is what it means to go through the day in the path of righteousness, for Kiddush Shem Shamayim.

    ג נַפְשִׁ֥י יְשׁוֹבֵ֑ב יַנְחֵ֥נִי בְמַעְגְּלֵי־צֶ֜֗דֶק לְמַ֣עַן שְׁמֽוֹ:

    4 Even when I walk in the valley of darkness, (in a challenging situation like we are in now) I will fear no evil for You are with me; Your rod (that gives us nisyonos) and Your staff (that supports us) – they comfort me. — we know that Hashem has a plan for us, and we are comforted by knowing that we are not just randomly cast to the wind.

    ד גַּ֚ם כִּֽי־אֵלֵ֨ךְ בְּגֵ֪יא צַלְמָ֡וֶת לֹא־אִ֘ירָ֚א רָ֗ע כִּי־אַתָּ֥ה עִמָּדִ֑י שִׁבְטְךָ֥ וּ֜מִשְׁעַנְתֶּ֗ךָ הֵ֣מָּה יְנַֽחֲמֻֽנִי:

    5 You set a table before me in the presence of my adversaries; You anointed my head with oil; my cup overflows. — You give me all I need and then some, even in front of others that want me to fail.
    ה תַּֽ֘עֲרֹ֤ךְ לְפָנַ֨י | שֻׁלְחָ֗ן נֶ֥גֶד צֹֽרְרָ֑י דִּשַּׁ֖נְתָּ בַשֶּׁ֥מֶן רֹ֜אשִׁ֗י כּוֹסִ֥י רְוָיָֽה:

    6 May only goodness and kindness pursue me all the days of my life, and I will dwell in the house of the Lord for length of days. — when we have clarity of our true purpose and true divine control over all, with that clarity we will understand that all that Hashem does is good and kindness and then Hashem won’t need to test us further and we will receive tremendous abundance of Hashems good and kindness.

    ואַ֚ךְ ט֣וֹב וָחֶ֣סֶד יִ֖רְדְּפוּנִי כָּל־יְמֵ֣י חַיָּ֑י וְשַׁבְתִּ֖י בְּבֵית־יְ֜הֹוָ֗ה לְאֹ֣רֶךְ יָמִֽים:

  11. I agree with your sentiment and I believe that properly educating the masses on how to invest and what to look out for would be greatly beneficial.
    The rush that people get when “investing in real estate” or “getting in on a deal” without fully comprehending what they are buying and how the partnership is set up is nearly addictive.
    I have done underwriting for several syndicators and would not put any of my money into their deals once I understood the partnership structure.
    In nearly every case the “investors” were being put on a separate LLC which was then added as a partner to the purchasing entity.
    While this structure can be beneficial when taking out a loan, it erodes the protections you have. You are not buying real estate, you are buying a security. The security you are buying is not regulated and is not liquid.

    That being said, I do believe that many legitimate syndicators are liable to lose their investors’ money due to the current market since they are heavily leveraged and have notes due around now.
    This often is not even a violation of their fiduciary duty, since with the information available at the time and the risk tolerance of the investors it was likely the correct decision.
    The banks that made a similar (reverse) mistake were given a golden parachute in the form of low-interest loans until their treasuries mature. Borrowers are not being afforded that luxury.

    I am not saying there aren’t Ponzi schemers out there, hardly a day goes by without an outlandish pitch.
    However, the ability to differentiate between a Ponzi vs a legitimate investment that failed comes with a sophisticated approach to investing.
    And while this is a legitimate forum for a PSA, I doubt this is where people should be learning investment strategy.
    Oh, and remember; NFT=Not F*#}$ing There.
    Keep away from things you dont fully comprehend.

  12. DO NOT CRITICIZE THIS ARTICLE! It is very real! Someone very close to me lost a lot of money in a Lakewood Scheme. Another relative of mine lost even more money in this same scheme. When you know multiple people in your own family who are going through this Tzaras, it is very painful for them and subsequently their entire mishpacha. It is also painful to see the criminal building himself a giant $5,000 000 home. Generally, the criminal comes across as being very Ehrlich and promises big returns when in fact there is nothing to return. May on one know of this pain! It is very difficult to swallow!

  13. Rabbonim should know something about finance. They should be well-versed enough to be able to guide us, their talmidim, to due diligence companies rather than say “it’s a scheme.” Some due diligence companies (i.e. investment managers and/or personal financial advisors) should have a relationship with the rabbonim that creates mutual TRUST with the potential investor so that the investor is guided with correct due diligence.

    I know my life would be vastly different if my Rosh Yeshiva knew a personal financial advisor.

  14. This is definitely not as simple as presented.
    There is often a very fine line between scam and high risk investment. If we’re talking about an outright ponzi scheme that’s obviously horrible. Most money is being lost in speculativ real estate or business deals. Many more millions or billions were made than lost in our community through high risk real estate or business deals. There is an inherent problem in the industry, that it isn’t by nature transparent and therefore based in trust.
    People either need to invest with large big name transparent companies which they are less likely to lose but their gains will be less or they should diversify to many deals and lose their money in some and end up ahead of the game.

  15. I rarely comment on articles or op-eds, but I want to share something important. I invested in an investment with the guidance of a “Rav/Rabbi/Mekubal” who extolled the virtues of someone whom I should invest with. It turned out that the recommended individual (a frum yid) misled me and caused me unbelievable agmas nefesh, having paid him to perform due diligence, (which none was done), and I ended up having to take over the entire management of the investment myself, where I have lost an ENORMOUS amount of money and discovered continued fraud, and I still can’t get out of the investment. So I vehemently disagree that a Rav should be involved in any business decisions. I am not speaking about asking the advice of someone like Rav Moshe Feinstein zt”l, but current lay leaders do not possess the business acumen to give financial advice on any level. I will share two small personal examples that will illustrate the point (beyond my personal story above). Someone approached Hagaon Rav Avigdor Nebenzahl shlit”a to inquire about a yid who is a well-known Chazzan on yamim noraim and a baal tokeia, if he is trustworthy to invest with. The Rav answered “I know him personally, but I don’t know anything about him regarding business”. This response was honest and helpful, without recommending or raising suspicions. Secondly, yesterday I had a conversation with Rav Asher Weiss Shlit”a (Minchas Asher), and he shared with me in the course of the conversation that “95% of mekubalim who give business advice are CHARLATANS” and they have no business advising in that regard. I also heard the same from the “Yenuka”, Rav Shlomo Yehuda Be’eri.
    One must get recommendations from qualified financial advisors before investing! Nobody wants to shell out the extra few hundred dollars or even a few thousand dollars but trust me, it is just like an insurance policy on the hundreds of thousands of dollars that you are investing. Start even with speaking to your accountant on advice how to vet. And lastly and most importantly, daven to H-Shem to help you come to the right conclusion and have siyata Dishmaya in your decision! Hatzlacha to all!

  16. If we want to solve this, it has to come from the top. & indeed the response has come from the top, because about 1 year before madoff was nabbed, 2 government retirement systems within this beloved tri-state area, had been offered amazing investing opportunities by madoff, and when they indeed realized “too good to be true”, they responded “Thank you, but no Thank you” so there you have it.
    Anyone who failed to get it on December 11th, 2008, probably shall nerve be capable of getting it.

  17. Unless you address the core of the issue this won’t help. The real issue is why do so many people feel compelled to take on these insane risks to begin with. Why do so many need to invest in anything more than diversified index funds? The answer is because people today all need to live lavish lifestyles. Earning 200k a year isn’t enough. They need to fly to Orlando for midwinter and Pesach, Israel sukkos Europe for a daf Yomi syuim, own a summer home etc. They lease a mini van for $800 a month plus an suv for $700 a month. Wives need a new shaitel every 3 months, $800 Shoes and a 25k tennis bracelet. Dinning out every week at $500 a plate restaurants because you are “foodies”. Children can only wear designer clothing.

    In a nut shell if you live a lifestyle where you spend $50K a month of course you need to invest in insanely risky stuff that return 50% till they don’t. You can’t just be a nerdy accountant

  18. A contributing item to the problem is when we take the issur of loshon hora to an extreme.
    Actual case:
    Person was hired to sell shares in an investment with huge returns guaranteed. One person, to whom many listen to for advice, realized that things weren’t right. He started to tell people to avoid it. The salesman went to that person’s rav and complained. The rav tells him to stop telling people not to invest as it’s loshon hora.
    Everyone lost huge amounts, with many losing their life’s savings, as it was a Ponzi scheme.

  19. The problem is how is such organization survive?

    1. If it recommends an investment and it fails it would be open to lawsuits.
    2. It may fail to recognize a scam the is well organized again it would be open to lawsuit.

  20. I have zero sympathy for greedy people losing their shirts. Double your money by folding it over and putting it back in your pocket.

  21. I am not from the community. Does anyone have any idea of the kind of schemes that the author is describing? He talks about it in general terms, but I have no idea what he is talking about. Can anyone give some examples not necessarily using peoples names? as others have said the past wealth is live below your means, and invest as much of your extra as possible in a broadbase low cost index funds.

  22. When The corruption Madoff happened the famous line going around the world was:
    What’s a person’s money worth after they leave this temporary physical world? It’s not even worth counterfeit or monopoly money, it’s completely worthless. What do you think the niftars children will buy a Sefer Torah in the zechus of the Neshama?

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