Chris Peak file photo
Rabbi Greer: Receiving “nonprofit” money behind bars?
If a government-supported housing nonprofit is paying a salary and legal expenses to imprisoned sex predator Rabbi Daniel Greer — that’s legal, and even a help, not a hindrance, to a victim struggling to collect on a $21.7 million court judgment.
At least that’s what Greer’s companies’ attorney argued in court this week.
That statement was made during a nearly two-hour virtual court hearing Tuesday afternoon in the federal civil case Eliyahu Mirlis v. Edgewood Elm Housing Inc., F.O.H. Inc., Edgewood Village Inc., Edgewood Corners Inc., and Yedidei Hagan Inc, which alleges fraudulent use of money by the named nonprofits.
The hearing took place one day after New Haven’s Board of Alders voted to sign off on another $900,000 in state tax breaks for all six of Greer’s local nonprofits, which own 53 affordable rental properties in the Edgewood neighborhood. During that vote, board leaders shut down any public debate about the legal controversies and fraud allegations surrounding those companies and how those allegations impact the use of dollars meant for strengthening neighborhoods.
That debate was allowed in federal court Tuesday in a preliminary hearing about the case.
Whether or not the case continues in federal court against Greer’s five New Haven housing nonprofits hinges in part on a few questions:
• Are those companies still paying the imprisoned sex predator’s salary and legal fees while he remains behind bars?
• Who gets to know that corporate financial information?
• And does it even matter in Greer’s rape victim’s thwarted ongoing pursuit to collect on a $21.7 million unpaid judgment?
Tuesday’s hearing marked the first virtual court appearance in months for the two-years-and-counting federal case. Mirlis filed the suit accusing the five local nonprofits controlled by Greer of funneling the imprisoned landlord money and helping him avoid paying a $21.7 million court-ordered judgment against him and a sixth local nonprofit, Yeshiva of New Haven Inc. A federal judge found those accusations of fraud credible enough last summer to issue a temporary restraining order barring Greer’s companies from buying and selling proprieties until the case is over.
Rape Victim’s Attorney: Open Corporate Books
Thomas Breen photo
One of Greer’s companies’ rental properties, under publicly subsidized rehabilitation on Elm Street.
Judge Charles Haight called the legal adversaries in the alleged fraud case to virtual court on Tuesday to debate three specific matters: a summary judgment motion by Greer’s companies’ attorneys, who are looking to have Haight end the case immediately and rule in their favor; a motion by Mirlis’s attorneys to deny that motion for summary judgment and to allow the case to continue; and a separate motion by Greer’s companies’ attorneys to stay discovery — that is, the collection of facts about how Greer’s companies operate — until after the summary judgment motion is ruled on.
During the virtual courtroom debate, Mirlis’s attorney, John Cesaroni, argued that all available evidence points towards Greer’s nonprofits continuing to cover his salary, benefits, and legal fees even as he remains behind bars.
“Mr. Greer is using these entities, we believe, to shield himself from the judgment and to keep and maintain the Yeshiva and his own lifestyle, and have money for his wife,” Cesaroni said.
He argued that Greer is doing that in part by continuing to collect a salary from one of those companies, Edgewood Elm Housing.
“Part of the limited information we know, Mr. Greer is getting a salary, but in a way I’ve never heard of before,” he continued. “According to his prior testimony, he’s paid either in bank checks that he takes to the bank and cashes, or uses to pay other bills. So it never sits in his bank account.” And Mirlis is unable to collect that money as part of the unpaid $21.7 million debt.
Cesaroni added that Greer’s legal fees in his combating of the separate civil and criminal judgments have been paid in part by Edgewood Elm Housing, supposedly thanks to an indemnification agreement in that company’s corporate bylaws.
“I have not ever heard or seen of an indemnification provision that a properly run company would interpret as paying for the legal fees of someone who committed an intentional wrong, much less sexual abuse.”
Cesaroni asked the judge to allow the case to move forward with discovery so that he and his client have a better sense of exactly if and how much Greer continues to get paid by these local nonprofits even while he’s in prison.
As those companies have so far rebuffed all discovery requests for how these companies financially operate, he said, Mirlis is unable to make his full case in court — and, most immediately, provide a full defense against the summary judgment motion.
He argued that allowing the case to go forward will reveal if these companies changed how they operated before and after Greer raped Mirlis between 2001 and 2003, and before and after Mirlis first sued Greer in 2015.
“We’re being asked by the defendants to take them on their word” that the companies have acted appropriately and legally in those time periods “based on the affidavit of a man who is a convicted felon and who has at every turn tried to thwart and frustrate the collection of this judgment.”
Meanwhile, Cesaroni said, Mirlis has been able to collect only around $240,000 to $250,000 of the $21.7 million judgment from 2017 against Greer and the Yeshiva so far.
An April 8 affidavit by Greer states that he was paid a salary by Edgewood Elm Housing between 2002 and 2019. His salary for 2019, the same year he went to prison, was $88,109.
Greer’s Companies’ Attorney: Greer Getting Paid Benefits Plaintiff
The Elm Street yeshiva.
In support of his motion for summary judgment, local attorney Richard Colbert — representing Greer’s five accused nonprofits — argued that financial details regarding how these companies operate are of consequence to the fraud case at hand, legally known as a “reverse corporate veil piercing.”
All that matters for the legal parameters of this case is whether or not Greer’s local nonprofits directly harmed Mirlis and have prevented him from collecting his $21.7 million judgment by hiding Greer’s assets, Colbert argued.
And that, Colbert contended, is simply not the case. There is no evidence that these companies have done anything other than operate in support of their decades’ long mission to support the revitalization of the Edgewood neighborhood.
And even if there has been mismanagement, he said, none of that is relevant unless if it directly hurt Mirlis.
Colbert discussed Greer’s salary in this context. Whether or not Greer continues to get paid by these companies is of no consequence to Mirlis, as it does not directly harm him, he argued.
In fact, he said, Greer receiving a salary is a good thing for Mirlis in the rape victim’s years-long quest to collect on his court-ordered debt. So is Mirlis’s contention that the five nonprofits continue to send money to the Yeshiva of New Haven.
“That the nonprofits give money to Mr. Greer and the Yeshiva obviously helps, not harms, the plaintiff’s ability to collect his judgment,” Colbert said. “But for the nonprofits having provided assets to the Yeshiva for decades, the plaintiff would have no Yeshiva building to foreclose on to satisfy his judgment, which is exactly what he is doing right now.”
“While the plaintiff has yet to collect on Rabbi Greer’s salary,” Colbert continued, “there is salary available for him to collect that would not be available to him if not for the nonprofits.”
Colbert also defended Edgewood Elm Housing Inc. paying of Greer’s legal fees even as the man remains in prison.
“Mr. Greer has a valid claim that he have his legal fees paid under the indemnification clause” included in Edgewood Elm’s bylaws, he said.
That logic picked up on an argument Colbert articulated in an April 8 memorandum in support of the motion for summary judgment.
“While Edgewood Elm may have an issue with having to pay Greer’s legal fees, Plaintiff has no standing to object to such practice as the assets being used to pay such legal fees belong to Edgewood Elm, are not subject to the Judgment and do not include any secreted assets belonging to Greer or the Yeshiva, against whom Plaintiff has the Judgment,” Colbert and two colleagues from the local law firm Day Pitney wrote.
“Similarly, Plaintiff has no standing to object to Edgewood Elm donating funds to pay the Yeshiva’s legal fees. Unless and until Plaintiff can show that the funds being used by Edgewood Elm actually once belonged to Greer or the Yeshiva (which he cannot show), or that Edgewood Elm is not a legitimate entity (which he also cannot show), how Edgewood Elm spends its funds are none of Plaintiff’s business.”
Regardless, Colbert concluded, none of this matters unless if Mirlis can credibly claim that these nonprofits’ activities have directly harmed his ability to collect on his judgment.
Colbert called on the judge to deny Mirlis’s request for discovery to find out more about how these companies operate.
“I am absolutely trying to cut off their right to discovery. You’re allowed to do that when another party cannot provide [sufficient reason] why they’re entitled to discovery.”
He said that Mirlis isn’t entitled to detailed information about how Greer’s companies operate. And he argued that Cesaroni’s accusations of money funneled from the nonprofits to Greer and the Yeshiva, if true, would only benefit Cesaroni’s client.
If, as Cesaroni claimed, the companies are collecting money and giving it out to Greer, his wife, and the Yeshiva, “I don’t understand how that’s a problem. They’re allowed to do with their money whatever they want to.”
Judge Haight took the matter under advisement, and promised to issue a ruling on Greer’s companies’ summary judgment motion in due course.