From Russia With Sleaze

Pier 48 burned late in 1996, along with a warehouse containing 200 or 300 cars. It wasn't arson, according to the DA's Office. A mechanic working on a car had apparently left a work lamp on, sparking the blaze. Under the terms of the city lease, mechanics shouldn't have been working on cars at the pier, but no fine was assessed. (The pier matter was handled by the San Francisco District Attorney's Office as part of an unfair business practices civil case against the JEC; it ended in a settlement after the charity went bankrupt.) And only 30 to 40 cars, in any case, were fully destroyed.

"The week after the fire we had like a hundred-thousand-plus[-dollar] auction," says Arthur Anchipolovsky, who ran San Francisco auctions for the JEC until the spring of '97. "We were not prepared at all, we were in a basically naked lot, there was no telephone, there was nothing. Nothing was working for us, and yet we managed to do that."

The Pils have been weathering a four-part attack on the tangled affairs of the JEC since 1997. The DA, the state Attorney General's Office, the U.S. attorney, and a bankruptcy trustee have descended like a series of plagues, but the strangest -- no, second-strangest -- part of the whole saga is how lightly these plagues have lain upon the Pils. Let's try to summarize: Local and state civil cases ended in settlements after the JEC lapsed into bankruptcy and there was no more money to chase. The city settlement restricted the JEC's advertising; the gist of the state's settlement forbids the Pils and several others (including Sam Budovsky, who'd sat on the JEC board) from sitting on the board of any "public-benefit nonprofit" until at least 2002.

The U.S. criminal case went quickly to a plea bargain. Last December Pil admitted to "structuring" charges, meaning he placed more than $1.7 million into a bank account in deposits of just under $10,000 each, to avoid reporting the deposits to the federal government. The sentence -- yet to be handed down -- could involve as much as 18 to 24 months in jail and a $250,000 fine. One term of the plea arrangement is that Mattie Pil won't be charged.

That's about it, as far as crime, punishment, and Rabbi Pil go.

But that shouldn't actually be it, at all.

A big question remains unanswered: What happened to the millions of dollars the JEC brought in by auctioning donated cars? Near the height of the auctioning operation, the JEC had four auction lots -- in San Francisco, Santa Clara, Los Angeles, and New Jersey -- that brought in anywhere from $30,000 to $150,000 each on any given weekend. A conservative estimate of what the JEC amassed during its three- or four-year media blitz is $25 million; the JEC itself reports $15.6 million in proceeds for the period between April 1993 and October 1996. But when the state attorney general froze the charity's accounts in '97, there was a mysteriously low $150,000 in the bank. Where'd it all go?

To charity, say the Pils. To student scholarships, day schools, a Russian-language magazine, and other Jewish organizations, including Chabad Lubavitch Mid City Center in L.A. Also, the charity had high overhead. The pier was expensive to lease, towing companies and mechanics were hired, expensive ads were placed.

But the JEC's financial records are an incomprehensible mess, and even the deputy state attorney general who worked on the case for a year and a half, Belinda Johns, says she can't account for the missing cash.

"I didn't get that far," she says. "When the bankruptcy was filed, I lost jurisdiction. I mean I wanted to know where the JEC money went, but I hadn't gotten there yet."

You remember Sam Budovsky and Luba Troyanovsky, the couple who are involved in the messy lawsuit with Bryansk Engineering Works over the collection of a large debt from Bulgarian shipbuilders? Of course you do, because I told you to forget.

Well, Budovsky sat on the JEC's board and even served as president for a while; Troyanovsky's role was less official. Starting in about '95 she was involved in a series of loans that attracted the bankruptcy trustee's attention. They amount to hundreds of thousands of dollars passing back and forth between the JEC and Troyanovsky's business accounts.

For example: In 1995, the Pils moved into their three-story, $472,000 house near 26th Avenue and Clement. The Pils have admitted that friends and acquaintances came up with the down payment for the house. According to Malcolm Leader-Picone, counsel for the JEC's bankruptcy trustee, Luba Troyanovsky wrote three checks totaling $100,000 toward the down payment. That contribution "appears to be one event in a sequence of loan transactions going back and forth between JEC/Beth Aharon [the Pils' day school] and Ms. Troyanovsky," writes Leader-Picone in a trial brief. He points out that the same amount returned to Troyanovsky seven months later in the form of a $100,000 check from the JEC, deposited into one of Troyanovsky's home-based businesses, AIBI.

Leader-Picone won't speculate on what the sequence of loans might mean. But "when the Pils needed money for a down payment," he says, "it was there. When Troyanovsky's account [AIBI] was overdrawn, money was there." These loans and others at least give the appearance of being a laundry cycle of money, out of the JEC and to the benefit of private people and businesses.

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