Did broker pray with, bilk clients?

Monday, February 25, 2008

In the past decade, the case shows losses of almost $20 million.

MCCLATCHY NEWSPAPERS

MIAMI — With a prayer shawl draped over his shoulders, stockbroker Gary Jay Gross cradled the Torah at the Chabad of Boca Raton — praying with worshippers and recruiting them as investors.

One was the rabbi. Another was an elderly widow. Another was a Holocaust survivor who met the broker at a Jewish scholarship dinner.

For their trust, the charismatic stockbroker promised to watch over their retirement accounts — persuading congregation members and others to funnel their money into the brokerage where he worked.

For years, Gross convinced clients he was honoring his pledges — in some cases, boasting double-digit returns on their investments.

But what the elderly clients say they didn’t know: The self-styled investment guru was wiping out their accounts in risky, highly volatile securities — losing millions — while racking up huge commissions for himself, according to arbitration complaints.

Along the way, investors say, he falsified reports to cover his tracks and hide the losses.

The FBI has just begun an investigation into a case that shows losses nearing $20 million in the past decade — the numbers rising with more clients emerging, according to arbitration claims.

Some clients have put their homes up for sale; others are seeking help from bankruptcy lawyers.

“I was suicidal when I found out,” said Sheila Kramer, 72, of Deerfield Beach, Fla., who lost $1 million.

The investigation is a case study of a state regulatory system unable to stop a troubled broker who left a trail of red flags.

Years before the latest wave of complaints, the Florida Division of Securities was warned about Gross — with numerous investors stepping forward — but no disciplinary action was taken, The Miami Herald found.

To this day, Gross has one of the longest records of complaints in the nation.

A Miami Herald analysis of nearly 600,000 stockbrokers found that he had more complaints against him than 99.9 percent of all brokers.

Nearly 100 of his former clients at Boca Raton’s Axiom Capital Management — including actor Henry “The Fonz” Winkler of TV’s Happy Days — are now his creditors.

“I had such faith,” said widow Carol Hoffer, 75, who entrusted her entire savings to Gross before her husband died. “I thought Gary was such a templegoer that he would be honest in his dealings.”

Gross has tried to distance himself from the scandal, resigning in January from the Boca Raton brokerage where he worked for five years. He has not been charged with any crimes.

The firm has paid nearly $3.8 million to some of the former investors.

For now, Gross, 56, says he doesn’t want to talk about the investigation. “These clients had investments that went down,” he said. “It’s that simple.”

But lawyers and investors say that it’s not that simple, that for years he parlayed his position as a member of an established synagogue to meet new customers — and later betrayed them.

Nearly a dozen investors said they trusted Gross, in part because of the devotion he showed to Orthodox Judaism, promoting himself as mishpoche: part of the family. Sometimes, he would wear his prayer shawl to the office, literally cloaking himself in Yiddishkeit.

That wasn’t the only thing that impressed his clients. Gross showed all the signs of success: expensive clothes; a Jaguar XJ; a home and country club membership at the Boca Raton Polo Club.

And he was eager to share with his clients, buying them show tickets and taking them to fancy restaurants, according to interviews.

From hundreds of court and arbitration records, a snapshot of Gross’ career emerges: A business graduate of Hofstra University, he owned dry cleaners before obtaining a broker’s license in November 1993 — shortly before filing for his first bankruptcy.

His first job was with Smith Barney in Boca Raton, and eventually he moved to Raymond James in 1996.

The following year, customers began to accuse him of sinking their money into unsuitable securities — not in keeping with investment objectives. But in each case, the brokerage denied the claims.

Gross moved to his third brokerage, CIBC World Markets Corp., in 1998, incurring new complaints — allegations of unsuitable investments — with his employer making several settlements.

But it wasn’t until he moved to UBS Financial Services in 2000 that the first big wave of complaints began — with investors claiming much bigger losses, records show.

With complaints mounting, Gross was allowed to resign from the brokerage “for conduct inconsistent with firm policies and standard business practices,” industry records state.

But it wasn’t so easy to move to his next firm. When he reapplied with the state to work at Axiom — a standard requirement — regulators began an inquiry.

Numerous investors were interviewed and hundreds of documents inspected by the state, but no actions were taken — even though lawyers for a half-dozen investors managed to settle more than $1 million in claims with UBS.

Instead of stopping Gross, the state agreed in 2003 to allow him to continue selling stocks. But regulators required him to be placed under “heightened supervision” — a form of self-monitoring in which the brokerage takes responsibility for a broker’s actions.

However, the supervising broker put in charge of Gross, David V. Siegel, had troubles of his own.

In the late 1990s, Siegel was censured, fined and suspended by out-of-state regulators for charging consumers unfair prices, records show. The day his supervisory duties began, he was in personal bankruptcy.

The state’s decision to allow Gross to continue as a broker proved costly.

Over the next four years, dozens of Axiom customers — some recruited at the synagogue — claimed they lost millions of dollars in personal investments turned over to Gross, in some cases their life savings.

At least 23 customers alleging a host of misdeeds — including fraud, mispresentation, excessive trading, and falsifying statements — lost at least $10 million, according to industry records.

Brandeis students raise big bucks for Chabad

Waltham Chabad hosts gala dinner

At its Feb. 10 gala dinner in a large hall at Lexington Chabad
House, nearly 100 Brandeis University students raised more than
$30,000 for the Waltham house.
Run by Rabbi Peretz and his wife Chanie
Chein out of their home across the street
from campus, the Waltham house
operates on a shoestring budget, hosting
crowded weekly Shabbat dinners and
holiday celebrations and offering a series
of classes as part of their iLearn series.
The house was established in 2001, and
the gala was the first of its kind. All
proceeds raised from the event will fund
operating expenses such as the cost of
food and a modest living for the rabbi.
There is a small fee for the popular classes offered at the house
throughout the week in which a reported 90 students are currently
enrolled.
“Chabad House is independently funded and we receive no major
contributions from donors or institutions,” said Chein, whose
students address him by his first name. “The people we serve don’t
have the ability to support our costs and that makes fundraising
extremely challenging.”
Relying only on small donations from people who come to the
house often, Chein said the house has operated under a deficit over
the last few years and there needs to be ways to support the work
they do. The gala itself was conceived and planned entirely by
seniors Cindy Kaplan and Yael Klein with help from other students,
including sophomore Lily Namanworth.
And despite the ice storm that night, close to 100 people attended
the fundraiser, paying the rather steep price of $180 a ticket.
Though shy of the 120 expected, in addition to the $31,000 raised,
someone reportedly made an additional pledge of $20,000.
What’s the attraction?
“Personal relationships and personal interaction,” said Chein, 32,
recalling a recent conversation with a 2004 Brandies graduate who
called to say hello and talk. “It develops and evolves and gets
people interested. That’s why they’ll come in big numbers. Everyone
feels special and important. We’re engaging, speak to important
issues and people of all backgrounds feel comfortable here.”
“We love Chanie and Peretz,” said Namanworth. “Every Friday
there’s a dinner at their house with something like 150 people.
They’re constantly giving to us and being there for the students.”
With a strong Reform, Conservative and Orthodox community,
Chein said Chabad is still able to have large dinners without
decreasing involvement in Hillel and other Jewish organizations on
campus.
“The number of those not engaged far exceeds those that are,”
Chein said. “When Chabad arrived we created a different model
and attracted those who were not engaged.”
He said the model starts with a “principle belief in the innate value
of every Jew regardless of, not despite, their current level of
engagement and observance.”
He said his goal and responsibility is to move everyone who walks
through his door forward from where they were before.
“As long as they’re moving forward, the individual answer is
different for everybody,” Chein said.
Senior Cindy Jacobs, who was raised Orthodox in New York, said
she’s been going to the house for Shabbat dinner and classes since
her sophomore year
“I hadn’t been happy at other places I’d gone before and a friend
told me about Chabad,” Jacobs said. “I’ve never had the experience
where I could consider a rabbi a friend. Peretz and Chanie are
amazing. Their door is always open and it’s a place where I can be
the kind of Jew I want to be. It’s important to have an anchor and
somewhere to go that feels like home.”

Multiply, Get Fruits

Have babies, get cash

Published: 02/20/2008

A Russian Jewish communal organization will pay Jewish families to have more babies.

At a news conference marking its tenth anniversary, the Chabad-led Federation of Jewish Communities of Russia announced it will subsidize Jewish families who have three or more children, Ha’aretz reported.

"Our goal for the next decade is to create a stronger community of young people and families," the group's chairman, Alexander Boroda, said. "This additional money is sometimes what a young family needs to have another child."

Aside from Chabad's interest in bolstering Jewish population, Russia has been in an ever-worsening demographic crisis since the collapse of the Soviet Union. The average Russian family has only 1.4 children, and the average male life expectancy is a mere 59 years. In 2007, President Vladimir Putin proposed a similar stipend for the general population to combat the crisis.

The federation’s stipend will be about $100 per month and is intended to boost Jewish community involvement.

The Jewish outreach absurdity

Instead of competing against each other, Jewish outreach groups should join forces to battle assimilation

Rabbi Levi Brackman

There has been a real transformation of the Orthodox Jewish landscape recently, but until now I have been only vaguely aware of it. Of course I knew that there are many different outreach organizations, all trying to reach and inspire the ever-elusive assimilated Jew. However, the extent of this movement within the Orthodox world—outside of Chabad—was not known to me.


Last week, for the first time, I went to a Jewish outreach convention in Baltimore, Maryland, which was hosted by The Association for Jewish Outreach Programs (AJOP). This convention was attended by over 550 Orthodox outreach professionals with representation from over 20 orthodox outreach organizations including Aish, Ner L’Elef, The Orthodox Union, NCSY, Torah Umesorah and Ohr Samayach. This was an opportunity for me to get a broad view of Jewish outreach and what makes it tick.


Clearly the sometimes insular Orthodox world has woken up and they have begun to organize in a serious way to combat assimilation. In fact it was inspiring to meet at the convention Yeshiva students from the local Ner Yisroel Yeshiva in Baltimore who had already decided to dedicate their lives to Jewish outreach. The ideal within the mainstream Orthodox Yeshiva world to leave the enclave and do outreach is still in its infancy there is no doubt however that the movement will grow both in strength and in numbers in the years to come. With the stunning statistics of assimilation and intermarriage throughout the Western world the awakening to do Jewish outreach has not come a minute too soon.



It seems, however, that there is still a rift between what is now known as the “kiruv world,” or the world of Orthodox outreach professionals, and the community of Chabad emissaries which do similar work. When, for example, one of the convention organizers presented statistics on outreach across the world the Chabad contribution to Jewish outreach was not included.



Considering the impact Chabad emissaries and Chabad organizations have had and continue to have on the Jewish world, the omission was absurd.


Same ultimate aim
Nonetheless, in conversation with some of the pioneers of the kiruv world, I found a dichotomy. When these pioneers got involved with outreach in the 1960s and 1970s, they told me that they took their inspiration from the work of the Lubavitcher Rebbe of Blessed Memory and from Chabad. One such pioneer actually explained to me that the only way they were able to get the rest of Orthodoxy involved in doing outreach was by making as if Chabad did not exist and then doing it independently of Chabad. “Chabad has to be ignored if we are to get the the ultra-Orthodox Yeshiva world to do outreach,” this individual explained.


From my experience Chabad also seems to ignore the good work done by other outreach programs, so this problem goes both ways. But my intention here is to encourage rather than to criticize. Clearly, all groups involved in Jewish outreach are doing important work and have the same ultimate aim, which is to stem the tide of assimilation and to encourage Jews to get more deeply involved with their Judaism. The methods and strategies used may vary slightly, but the resources displayed at both the AJOP and the Chabad conventions show that they are essentially the same. The question then demands to be posed: Why are they ignoring each other?



The notion that the outreach organizations are in competition with one another is ridiculous. With the high rate of assimilation and intermarriage in the West, I cannot imagine that there could be too many outreach workers in the field. The day that happens will be a blessed one. The battle against assimilation is far too important for its warriors to get embroiled in politics of this sort. Undoubtedly, all the outreach organizations, Chabad included, should put their differences aside and pool together all their resources and ideas to create an even brighter Jewish tomorrow.



Rabbi Levi Brackman (www.levibrackman.com) is executive director of Judaism in the Foothills (www.jitf.org). His upcoming book, about Jewish Business Success, is set to be published in late 2008.

'Laughter yoga' gains popularity in Lower Hudson Valley

Marcela Rojas
The Journal News

DOBBS FERRY - Inside the Chabad Synagogue on a recent Wednesday night, Simeon Darwick encourages a small group of believers to produce what he calls an innate - but little practiced - sound within them all.

With a bit of prompting, laughter, in all its forms, suddenly reverberates throughout the sanctuary. From soft, childlike giggles to loud, infectious guffaws, the merriment is inescapable.

"Laughing is the greatest thing. It's contagious. It crosses all boundaries, religions, sects and genders. There's nothing it can't break through," said Darwick, a holistic health counselor from Hartsdale. "If it's not programmed nowadays in the society we live in, people don't spontaneously laugh."

In December, Darwick, who runs Life Integrated Foods, began teaching "laughter yoga" at Chabad, a relatively new technique now gaining a following in the Lower Hudson Valley. The 45-minute class, also known as the Laughter Club, blends quick laughing exercises with gentle stretching and yoga breathing. The combination is hailed as simultaneously energizing and relaxing.

Along with the enjoyment participants say they experience from a good, hearty chuckling session, research has shown that laughter has tremendous therapeutic value.

"I don't think about pain when you do this," said Bea Gottlieb of Hartsdale, 84, who suffers from arthritis and walks with a cane. "You just feel happy and alert."

"You generate healthful chemicals," chimed in Joel Ross, 58, a retired medical researcher from Ardsley. "There's no reason to go through life sour - might as well laugh."

Indeed, studies have indicated that laughter is a natural healer with several health benefits, including reducing stress, boosting the immune system and increasing the supply of oxygen to the body.

"Stress is the No. 1 killer. It affects your heart. It's bad for your immunity," said Dr. Kishore Ranade, a neurologist at Putnam Hospital Center and clinical assistant professor of neurology at New York Medical College in Valhalla. "One of the ways to relieve stress is to laugh."

Ranade further explained that laughter jogs the internal organs, producing an aerobic activity that stimulates the heart and circulation. One minute of laugher is reportedly equivalent to 10 minutes of jogging or rowing.

Deep belly laughter clears out the lungs, allowing more oxygen into the body, Ranade continued. Laughter also raises the antibodies immunoglobulin A - strengthening the immune system - and releases endorphins, a natural pain killer, he said.

"Anecdotally, happy people don't get sick," he said. "Positive emotion does have a beneficial effect on your immune system."

Laughter yoga, or hasya yoga, was founded by Dr. Madan Kataria in 1995. Kataria, a physician from India and a student of yoga, was writing about laughter for a medical journal when he came up with the concept. Today, there are more than 5,000 laughter clubs in more than 50 countries worldwide.

Chun Kim-Levin of Mahopac, a longtime hatha yoga instructor, became certified in laugh yoga in April. She was trained by Kataria in Niagara Falls. She leads a laughter club session on Fridays at the Mahopac Public Library, and has offered the program at senior centers and women's shelters. In December, she gave an introductory class to a dozen people at the Brewster Public Library and expects to return there regularly.

"In ordinary settings we look for reasons to laugh," said Kim-Levin, who offers several therapies through her LifeSpring Holistic Services. "When we laugh without any reason, then everything suddenly can seem funny."

In Mahopac, she begins the class with enthusiastic clapping while repeating the phrase "HO HO HA HA." She moves into a series of laughter exercises, such as the "lion" laughter that works to release tension in the thyroid gland, she said. There's the greeting laughter, shaking hands or bowing while chortling, and bicycle laughter, air peddling to a vigorous har-de-har-har. Each of the exercises lasts about 20 seconds and is followed by stretching and breathing.

Typically, what starts out as forced, simulated laughter usually turns into genuine, uncontainable laughter.

Liz Benediktson said that since taking the class, she has noticed that her muscles are looser and that she is more flexible.

"I couldn't imagine life without it," said Benediktson, 57, a library clerk from Mahopac. "It opened up my heart."

For Marcia Allen, laughter yoga has made day-to-day challenges easier to deal with.

"It leaves me feeling light and free," said Allen, a retiree from Yorktown. "I think I laugh more."

Dr. G.J. Peister, a nonpracticing psychiatrist from Suffern, began teaching laughter yoga on Wednesday nights at the Peace through Play Nursery School in Chestnut Ridge in November. She too became certified by Kataria last year. Peister offers laughter yoga through her Dr. Wellbeing program.

Personally, she said, the practice has improved her digestion and her overall outlook on life. Stored negative energy, she emphasized, is released with laughter.

"The thing about laughter is that it's always been tied to humor," Peister said. "But what laugh yoga does is say do it (laugh) because we can do it. You can learn to laugh for no reason whatsoever."