Manhattan, NY – Rabbi Allen Schwartz recalls Chaim Regensberg as a family man who hosted fundraisers in his Upper West Side home for charities in Israel or for Congregation Ohab Zedek, where he was an active member.
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“I always thought he was an honest guy, upright in all areas,” said Ohab Zedek’s rabbi, who has known Regensberg for about 10 years. “But something happened, he got in over his head and instead of coming clean immediately, it got worse.”
Federal prosecutors paint a different picture of Regensberg, 44, who was sentenced to eight years in jail last week for defrauding nearly two dozen people in a three-year, $11 million Ponzi-scheme.
They say he methodically roped in members of his Orthodox community with promises of returns as high
as 18 percent via fictional investment schemes until his arrest in March 2008. A jury last April found him guilty of two counts of securities fraud and seven counts of wire fraud. He faced 20 years.
Federal Judge Victor Marrero said Regensberg, who was a gabbai at Ohab Zedek, used a “mask of piety” to lure investors, according to the New York Post.
But Rabbi Schwartz said no one would have invested with Regensberg because of his position at the shul.
“He was one of seven gabbaim,” said the rabbi on Tuesday. “It would be very strange to me if someone said, normally I wouldn’t have invested with him but I will because he was a gabbai. People invested with him because he was making money for them in good times.”
The rabbi speculated that “what probably happened was when times got tough he did something too risky. Even the investors who want his head now would tell you he [appeared to be] an honest guy.”
According to the indictment by the U.S. attorney for New York’s Southern District, Michael J. Garcia, Regensberg falsely told investors he had access to initial public offerings on foreign exchanges before the general public, and that he could sell such stocks quickly for returns of 5 to 15 percent within weeks.
A second scheme involved loans to trading firms to use for leveraged investments. Since the funds supposedly were not traded but kept in accounts as collateral, Regensberg told investors he could guarantee a return of up to 18 percent per year, according to Garcia, who said Regensberg in reality lost large portions of the money in unrelated risky investments; he then began paying early investors with income from new ones in a Ponzi scheme, while diverting large amounts to himself and his relatives.
The scheme fell apart when some investors confronted Regensberg in 2007 about missed payments, and he presented them with a forged bank document claiming a $9 million balance, while the actual sum was only about $9,000, prosecutors convinced the jury.
Rabbi Schwartz said neither he nor the shul had any money invested with Regensberg, and that most of those who lost money attended other congregations.
In giving Regensberg the benefit of a doubt, the rabbi speculated that if the investor had engaged in fictitious money schemes, he had likely done so “to fix a situation that just went bad” in an effort to recoup losses from legitimate investments.
At his sentencing, Regensberg said his crimes stemmed from an addiction to gambling. But Rabbi Schwartz said he took that to mean high-risk investments, and did not know Regensberg to frequent casinos or other forms of gaming. “Investments that were too risky, that’s how I understood it,” he said.
Zev Brenner, a member of Ohab Zedek and host of the Talkline Jewish radio programs, said people at the congrega-tion were upset by the scandal but that many believed, as the rabbi does, that Regensberg started with pure intentions.
“They feel like this is similar to the [Bernard] Madoff story, where he started out innocently and got over his head and kept taking future money to pay back the past,” said Brenner. “When you do that, you’re bound to fail.”
Another longtime member of the shul, Glenn Richter, said he knew no one who was cheated by Regensberg.
“There is a large transient population [at the shul], people who stay here only a few years and move on. It could very well be that this happened to some of them,” said Richter. “But logically people who are burned aren’t going to get up and wave their hands and tell everyone.”
Richter, who knows Regensberg casually, said his impression, “like everyone else’s is that he was a very upstanding gentleman. He wasn’t a flashy guy. A gabbai is somebody who is trustworthy. You don’t give that position to someone who is a bubblehead.”
Rabbi Schwartz said Regensberg would be welcomed back to the synagogue on his release only if he showed a willingness to atone. “According to Jewish law, it’s not just to do the time but to gain forgiveness from those who were hurt.” The Talmud, he said, discusses different ways to atone for a financial crime, from rituals to restitution.
In his Shabbat sermon this week, Rabbi Schwartz stressed the importance of compassion for Regensberg’s wife and three children, citing the Torah’s warning that the iniquity of the father would be visited upon his sons.
He said Regensberg’s wife and children had not been to the shul in some time, but the congregation president had reached out to them.
“The family will need support,” he reiterated in an interview Tuesday. “The children will have no one to sit next to in shul. And what’s going to happen to them in school? Kids can be cruel. We have to have sensitive parents, even parents who were involved, to be careful what they say in front of their kids, who could repeat it in school.”
The lesson for the community, he said, was to take prompt responsibility for any misdeeds.
“There are people in power in the Tanach who do things wrong and their greatness is that they don’t just bury themselves deeper in their wrongdoing,” said the rabbi. “[Regensberg’s] tragic story is that he was not able to dig himself out. It was destined to end this way.”
ruining other peoples lives and hes a good man. john gotti also gave to his spirital place
I am so tired of all these pleas for rachmonis for these yiddeshe ganovim but little if any effort by those making the pleas to organize any efforts to help those whose retirement and life savings have been wiped out (the latter often being viewed as “rich jews’ who simply should have exercised greater care and due dilligence with their investment decisions). They are already planning to welcome him back in to the community if he shows contrition and perhaps we can arrange a simcha party for him while he is in prison.
Bet you that we will not hear and see all the clamor to proclaim “Chillul Hashem” like we do when a “Chusid” does something wrong.
Think about how many non-chasidim storied you have heard in the past half year, these stories make the “Chasidim” wrongs, look like child play, yet we never have this huge outcry of “Chillul Hashem”
Hypocrisy at its best! I’m not saying that Mr. Rosenberg isn’t a good man etc. but what I can’t stand is when I always heard from modern orthodox people whenever a Hassidic person was involved in white collar crimes, they would always tell you about Dina Demalchusa etc. and would never help out a Yid with legal problems, they would only be busy about Chilul Hashem etc. but what you see from this story and from a few other stories that happened lately, that if its someone of their own who is involved in criminal conduct who will hear from the same people the opposite, and will suddenly become such Balei Rachmonus etc. what a bunch of Hypocrits! Yes! there is a mitzvah of Pidyon Shvuyim for all Yiden even when a Chasid is in trouble! and Yes! there is a Halacha of Dina Demalchusa & Chilul Hashem is a grave sin, but stop with the double standard already!
Do we hear this kind of compassion from rabbis for poor? for widows? for orphans? Do they come to the defense of children whose parents divorce, leaving them emotionally stranded? This constant defense of criminality by our rabbis makes this misbehavior socially acceptable and defines these rabbis as well.
evey jew has some spark left we have to find that spark and help him do teshuva
I’m Modern Orthodox and this is a Chillul Hashem. I’m sick and tired of a new fraud story appearing on VIN nearly every week.
His tzedakah fundraisers are worthless in the eyes of the rebbono shel olam. He is a lowly person stealing from people and then hiding behind tzedakah. I am sick and tired of “good” people covering up their chilul hashem by giving over a few dollars to tzeddakah. Where in the world do you think that tzedakkah money originated from?
Gezeilah!
Ever hear of mitzvah habo b’aveirah????
and why is this not loshon hora?
OK all of you guys who think that the Modern Orthodox dont think this is a chilul hashem. I daven in the shul, its a HUGE chilul hashem, no more no less than when a “chusid” (i prefer “chasid”) does something like this. Its just terrible. And as for whether the Rabbi is excusing geneivah, nothing could be further from the truth, He got up once and apologized to the whole shul on behaf of the “mizbeach.” But unlike the chasidim who run around and yell “mesirah” when someone goes to the secular authorities, the Rabbi didnt stop his baala batim from doing that and didnt criticize them. Neither do I. Mr. R. didnt cooperate, beth din has no real enforcement power, and Mr R has/had to pay the price. But is very different to speak out in support of a wife and children. (Nobody is speaking out for the criminal!). And yes, the Rabbi speaks out for ALL people in need. Mrs. R and her children are no exception.
he is a ganiff, plain and simple.
he took my money and I have the loss.
Let him make restitution and we can talk…till then…let him enjoy jail
I find it strange that there is a headline saying the Rabbi called him a good man, but in the article it never says that. It seems very clear that the Rabbi would only allow him back if he showed he was atoning for what he did. With up to 8 years in jail, this time the gonif isnt getting away with it. In many shuls, the Rabbis will never address something like this, usually because the thief usually is a big financial supporter.
why can’t these pepole learn how to make money erlich did he learn in lakewood or satmer