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Revered as Business Guru, Rabbi Faces Questions About His Organization’s Finances

?Huge Influence?: Rabbi Pinto draws crowds in New York and Israel. Image by ILAN ASSAYAG/HAARETZ

On the streets of Ashdod, a hardscrabble port city in Israel’s southern desert, Rabbi Yoshiyahu Yosef Pinto is considered the local saint.

Six middle-aged men sitting outside a cafe nodded with recognition when asked about the 37-year-old scion of Moroccan rabbinic royalty. “He’s an honored person here,” one said. Another man, hearing the kabbalist’s name, shouted “Tzadik,” or righteous one, as he hurried down the street.

And his reputation isn’t confined to the Jewish state’s grittier precincts. In the hallowed halls of the Knesset, Israel’s parliament, Pinto is revered. A December 2010 reception in his honor was attended by five Cabinet members and an Israel Defense Forces major general. In January, he hobnobbed with opposition leader Tzipi Livni of the Kadima party at a dinner in a Tel Aviv hotel. And as the Forward prepared this story, current and former Israeli government officials contacted the paper on Pinto’s behalf.

Home: The Manhattan townhouse where the rabbi and his family live is in foreclosure. Image by Shulamit Seidler-Feller

“He has a huge influence,” said Yoel Hasson, a member of the Kadima party in the Knesset. “He’s connected to a lot of people in Israel, to people in Israeli politics.”

He also commands respect in Israel and increasingly in the United States as a sought-after adviser for businessmen and real estate developers. Jacky Ben-Zaken, a prominent and wealthy Israeli investor, is an avowed follower who cites the young rabbi as a key adviser in his business affairs and donates millions of dollars to his charities.

In New York, appearances by the charismatic rabbi can draw more than 100 people to his Midtown Manhattan yeshiva, including Israeli-born real estate moguls and Jewish communal heavyweights. LeBron James, the superstar professional basketball player, has also consulted with the rabbi.

But a Forward investigation of Pinto’s Manhattan not-for-profit Mosdot Shuva Israel points to the contrast between the rabbi’s lifestyle and his reputation for modest living, and raises questions about the rabbi’s image as a business guru when his own not-for-profit faces financial problems.

Among the Forward’s findings:

• The $6.5 million Manhattan townhouse where Pinto lives, which is owned by Mosdot Shuva Israel, faces foreclosure;

• Mosdot Shuva Israel has not responded to or paid a $48,000 judgment against it for failure to obtain workers’ compensation insurance;

• The top financial officer of Mosdot Shuva Israel, who does not speak English, could not say how many employees worked for the organization;

• Former donors to the organization claim that associates of the group employed insistent and unusual fundraising tactics.

None of these activities directly involves the rabbi himself, and all focus on a single component of his sprawling international network, which a senior Mosdot Shuva Israel official estimated runs on $50 million to $60 million a year.

When Pinto arrived at his Manhattan yeshiva late one March night, a roomful of men surged to their feet. The rabbi was more than an hour and a half late to his own 8 p.m. lecture, but few in the mostly Hebrew-speaking crowd had headed home. As he passed down the center aisle of the elegantly appointed sanctuary on the ground floor of the former site of The New York Genealogical & Biographical Society, which Mosdot Shuva Israel purchased for $28.5 million in March 2009, followers pushed toward him, some bowing to kiss his hand, others grasping and shaking it.

Pinto’s relative youth is easy to miss under the untamed black beard that flares from his face like a sunburst. His eyes are piercing and magnetic, but he often averts or closes them while in conversation. At times he shuckles back and forth, as though in prayer, while speaking. And though he can appear unsteady on his feet, Pinto’s grip is like a steel trap, powerful and capable of seemingly endless endurance.

Pinto isn’t just any young kabbalist. His father, Haim Pinto, is chief Sephardic rabbi of Ashdod and a descendent of a long line of revered Moroccan rabbis and saints. His mother is the granddaughter of the Baba Sali, a leading mystic of the Israeli Sephardic community. Despite his Sephardic roots, however, the younger Pinto is a product of Ashkenazi yeshivas and dresses in the style of the Lithuanian ultra-Orthodox.

On that March evening, Pinto delivered his lecture in Hebrew with his 10-year-old son sitting by his side and Manhattan real estate dealer Ben Zion Suky, his closest associate in America, standing behind him, casually leaning against the yeshiva’s carved wood ark. As Pinto finished, the men in the room stood and shoved forward, creating a crush around the rabbi. (Women sat behind a curtain in an upstairs gallery.) One by one, the young kabbalist gave the men a blessing and a bottle of grape juice.

“My rabbi is like my father,” said Igal Ashur, who said he had been working for the rabbi at Mosdot Shuva Israel for 15 years. “For me, he’s everything.”

Pinto’s followers’ desire to draw close to him apparently creates such crowd-control issues in Ashdod that a turnstile has been installed in his yeshiva there to manage access to the rabbi’s living quarters. Those quarters are modest, consisting of a small bedroom with two beds and some other rooms.

“He doesn’t want a shekel for himself,” said Yossi Amos, a real estate developer and close Pinto aide based in Israel.

Despite its plain exterior, the rabbi’s Manhattan townhouse, where he was interviewed by the Forward in February, contrasts with the simplicity of his Israeli home. Located between First Avenue and Sutton Place in Midtown, the building was purchased in 2007 for $6.5 million by Yossi Zaga, a California-based clothing executive and real estate developer, and then donated to Mosdot Shuva Israel.

The Forward has also learned that Pinto regularly travels first class to and from Israel.

Pinto did not respond to a request for comment about this apparent contrast.

Visited on a Tuesday, the main floor of the rabbi’s Manhattan home was decorated with flower arrangements that Suky said had been gifts from the rabbi’s followers for Sabbath. On the ground floor were an elegant, spotless kitchen, two sitting rooms, and a glass cabinet packed with silver. Downstairs, a maid cleaned a second, smaller kitchen.

When asked about his personal salary, the rabbi responded, in English, that it was “minimum.” Suky, his aide, who served as a translator during the conversation, clarified that Pinto meant he received “a minimum salary,” and said that followers gave private gifts to supplement that income.

“A lot of people love the rabbi, like myself,” Suky said. “And if the house needs something we have many people that donate to the house.”

Pinto described his network of yeshivas and social service organizations as a decentralized web of independent operations to which he provides inspiration and guidance. These operations include three yeshivas in Ashdod, two in the southern Israeli city of Ashkelon, one in Kiryat Malachi and a newly built yeshiva in Rishon LeZion, which, all told, are training 500 students to be rabbis. There are also two large schools for girls in Ashdod and a professional training school for women in Ashkelon. A soup kitchen in Ashdod serves 3,500 hot meals a day and gives out 11,000 food baskets on holidays. One of the Israeli yeshivas also provides living stipends to 180 widows. Followers of the rabbi also provide wine, challah and candles in hospitals around Israel on Fridays.

The rabbi also described separately incorporated Shuva Israel organizations in Venezuela, Argentina, Los Angeles, two in Miami, one in Queens, and one in Brooklyn. Many give out food on weekends or host Sabbath meals; many also provide Jewish learning.

But people representing the rabbi were unable to provide details on the management and finances of Mosdot Shuva Israel in Manhattan.

The rabbi claimed no knowledge of the annual budget. A request to Mosdot Shuva Israel’s American public relations firm to speak to the head of the organization led to a phone call with a man named Meir Pinto, who identified himself as the head of finances of Mosdot Shuva Israel.

Mosdot Shuva Israel is only one element of the Shuva Israel network, but Meir Pinto — not a relation of the rabbi — said that it alone paid the rabbi a salary. It also owns the home in New York where the rabbi lives.

Meir Pinto speaks Hebrew and little English and was reached in Israel. He said that the budget of Mosdot Shuva Israel in 2009 was $5.5 million, but couldn’t say exactly how many employees the organization had, or exactly how many students study in the yeshiva. Nor did he know what was spent in 2010.

In a phone call with the Forward, Meir Pinto said that he didn’t think that Mosdot Shuva Israel had more than three employees.

By comparison, an average Conservative or Reform synagogue with an annual budget between $5 and $6 million would have around 20 full-time employees, according to data from the Faith Communities Today study analyzed by Steven M. Cohen, research director for Synagogue 3000. Cohen called the number a low estimate for a variety of technical reasons, particularly because the figure does not include part-time employees. That data is from a sample of 26 synagogues whose budgets lie within that same range.

Meir Pinto said that Mosdot Shuva Israel’s budget went to building maintenance, employee support, weekly Sabbath meals for 150 people and food deliveries during the holidays. He said that there were about 30 students in the yeshiva and that he wasn’t sure who taught them. He stated that funds raised for the yeshiva were not transferred to other Shuva Israel operations.

Unlike other tax-exempt groups, religious organizations are not required by law to make public information about their spending or operations. But Mosdot Shuva Israel chose to register with federal tax authorities in 2004, and is required to make its exemption application available for inspection upon request. When a Forward reporter visited the organization’s office March 15, a secretary said that an in-house accountant named Steven Shay was the only person who would have the documents, and that he was out of the office and unreachable.

The Forward was unable to determine who is in charge at Mosdot Shuva Israel. Igal Ashur, who identified himself as an employee of the organization, named Ben Zion Suky and another Pinto aide named Yossi Azur as being in charge of the administration of the Manhattan yeshiva and the hiring of yeshiva employees, with Pinto’s approval. Rabbi Pinto’s spokesmen have not been able to clarify who administers the group.

Mosdot Shuva Israel grew out of its previous yeshiva on 61st Street in Manhattan at an opportune moment for Rabbi Marc Schneier, spiritual leader of The Hampton Synagogue, on Long Island. Schneier told the Forward that he purchased the four-story building at 122 East 58th Street from its original owners for $24 million in 2003 in order to build a new synagogue to serve his Long Island congregants during the half of the year when they weren’t living in their summer homes.

“It was going to be a fabulous banqueting and catering facility with a sanctuary,” Schneier said. The top floor, a once-elegant library with a cracked skylight, was going to be converted into a ballroom. Kosher caterers were bidding to operate the space. Then the economy crashed.

“By divine providence, God sent this Rabbi Pinto, who I’d never heard of before,” Schneier said. Pinto’s organization paid $28.5 million for the building in March 2009, during the darkest moments of the recession.

“As the economy was crashing, he could have chosen to renegotiate the price, which he never did,” Schneier said. “I will always admire him for having been the gentleman that he was.”

When asked why his organization didn’t renegotiate the deal to suit the changing real estate environment, Pinto answered with a parable about a millipede and a frog.

Pinto went on to say that a group of supporters had been handling the purchase, that he had not been directly involved, and that the funds had been raised before the negotiations were begun. “They started talking to the banks, getting commitment with the banks, and they didn’t want to lose the relationship,” Pinto said through Suky. “Also, it’s not like they brought new money to buy this building. It was money that was dedicated to buy a building.”

Pinto also said that, at the time, no one thought the recession would continue for long. “People thought, one month, it’s going to be okay, everything will be okay,” he said.

But even as the organization spent heavily on the purchase of the yeshiva building, Mosdot Shuva Israel was failing to meet its financial obligations in other areas, the Forward has learned.

Last November, the New York State Workers’ Compensation Board entered a $48,000 judgment against Mosdot Shuva Israel for failing to carry workers’ compensation insurance for an eight-month period in late 2009 and 2010, which is a violation of state law. According to Brian Keegan, a spokesman for ithe board, judgments are only entered after the board has sent four or five letters to an organization and referred the matter to a collection agency. In this case, Keegan said, Mosdot Shuva Israel has not responded to any of the board’s communications and has not paid the judgment.

“There’s been no correspondence from them related to the penalty,” Keegan said.

Meir Pinto said that he was unaware of the Workers’ Compensation Board judgment. According to Workers’ Compensation Board records, the organization currently does hold workers’ compensation insurance.

Meanwhile, the townhouse owned by Mosdot Shuva Israel, where Pinto and his family live, is in foreclosure.

The property was purchased in April 2007 by Yossi Zaga for $6.5 million. According to a New York Times article, Zaga found the property through Ilan Bracha, a well-known broker at Prudential Douglas Elliman and a follower of Pinto. Zaga took out a $4.4 million mortgage. In August of that year, Zaga donated the property to Mosdot Shuva Israel.

But the mortgage was still outstanding, and, according to court documents, payments were not made. In November 2009, JPMorgan Chase Bank, N.A., which had inherited the mortgage from the original lender, began proceedings to recover approximately $4.6 million in principal and interest on the loan by foreclosing on the property. As of that filing, no installments had been paid on the mortgage since May 2009. Both Zaga and Mosdot Shuva Israel were named in the suit.

At least six foreclosure settlement conferences have been scheduled in the case since March 2010. When asked about the case, Meir Pinto said that Zaga was handling it. “They’re not going to take the building,” he said.

Reached by telephone, Zaga declined to comment.

The business troubles at Mosdot Shuva Israel could be seen as ironic, given Rabbi Pinto’s reputation as an adviser to businessmen, and particularly to real estate brokers.

“For me he’s not only a rabbi, but the smartest person in the world, who I can speak to about any issue in the world,” said Ben Zaken, the Israeli mogul who is a director at Financial Levers LTD. Last year, Ben Zaken said, his partners at the firm offered to buy him out. Ben Zaken went to Pinto.

“He said there’s no dilemma,” Ben Zaken said. “You buy them [out].”

Before speaking to the rabbi, Ben Zaken said, he didn’t “even have the courage” to consider the option. In November, he signed a $200 million deal to up his share in the company from 12.9% to 82.1%. The transfer will soon become final.

In an interview with the Forward, Pinto claimed not to give business advice, per se. With Suky translating from Hebrew, the rabbi said: “The rabbi, most of the times he gives blessing for people to succeed in what they do, in whatever they do, in whatever they want to do. It’s more of a blessing.”

Three former donors to Mosdot Shuva Israel, all of whom spoke off the record, citing a reluctance to criticize the rabbi publicly, recalled being drawn in by the rabbi’s charisma and the possibility for networking, but described insistent and unusual courting by the organization’s Manhattan-based fundraisers.

One former donor recalled his first meeting with Pinto, which took place at the office of a prominent real estate broker. “I walked into a room, not with Chabad, religious-looking people, but with secular-looking people. And I said, ‘Oh my goodness, why are there all these people here? There’s got to be something going on.’”

Later that evening, the donor was taken for a private meeting at the rabbi’s home. The next morning, one of the Manhattan gabbais, rabbinic aides who act as fundraisers for Mosdot Shuva Israel, showed up unannounced at the donor’s offices, offering the donor a menorah as a gift from the rabbi. “Pinto sees in you big blessings,” the donor remembered the rabbi’s employee saying. The employee asked for a $10,000 donation; the donor gave a smaller amount.

Twenty minutes later, a second gabbai arrived at the front desk of the donor’s office. “He’s not the guy to deal with, I’m the guy to deal with,” the second gabbai said of the first gabbai.

“They both wanted to claim me,” the donor said.

Another former donor said that this sort of jockeying for funders had happened among the gabbais. There is “a battle over who brought in who in terms of the people working within the organization,” the second former donor said. “I’ve seen arguments with respect to who had brought in, for lack of a better word, the customer.”

Meir Pinto said that none of fundraisers for Mosdot Shuva Israel or any of the Shuva Israel organizations earn a percentage on the money that they raise.

One former donor described attending shiurim, or lectures, by the rabbi in a packed room. When he began attending the shiurim, the donor said, he would sit near the back of the room. Gradually, the gabbai who served as that donor’s link to the organization helped him move closer to the rabbi, until he was sitting next to the rabbi.

“He’s holding my hand with a grip that is incredibly powerful that he’s able to maintain for a really extended period of time,” the donor recalled. “There’s something to that. I don’t know what it is. But there’s something that draws you in about that. There really is.”

Some donors said they were offered gifts from the rabbi — Kiddish cups, menorahs, silver frames with religious sayings on them, and watches. After presenting the gift on behalf of Pinto, gabbais would ask for donations, sometimes in the thousands of dollars, to cover monthly operating expenses, or for individual charity projects.

Pinto and Suky said that the gifts given to followers were generally gifts that other followers had given to the rabbi.

As the Forward prepared this story, supporters of the rabbi marshaled significant resources in an effort to influence the newspaper’s coverage. After a reporter sent a list of questions about the rabbi to an American public relations firm representing his organization, an editor at the paper received a phone call from Shai Bazak, Israel’s consul general in Boston, asking the paper to contact Yossi Elituv, an editor at a Haredi magazine, to talk about Pinto.

Before being appointed consul general in August 2010, Bazak served as a media adviser to Benjamin Netanyahu during his first term as prime minister, from 1996 to 1998, and also as consul general in Miami.

Days later, Yossi Lahmani, executive director of the Friends of the Yitzhak Rabin Center and a former official in the defense ministry, flew to the United States from Israel, unbidden, specifically to lobby the Forward on Pinto’s behalf. He said that Pinto had not asked him to make the trip. But even though he flew to New York in a rush on a few days’ notice, he declined to say anything on the record about the rabbi or his organization.

Nathan Jeffay contributed reporting from Israel. Maia Efrem and Gal Beckerman contributed reporting from New York.

Contact Josh Nathan-Kazis at [email protected] or on Twitter @joshnathankazis

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