Wednesday, July 4, 2012

Federal Investigation of Financial Manager Associated with Kabbalah Centre

We previously blogged about the Internal Revenue Service’s investigation of the Los Angeles-based Kabbalah Centre, known for its celebrity followers (including Madonna and Demi Moore).  In Kabbalah Centre Case Taken up by Federal Authorities, Police Say, the Los Angeles Times reports that the Palos Verdes Estates Police Department, which had been conducting a criminal investigation of the management of the assets of a wealthy heiress (Susan Strong Davis) by her business manager, John E. Larkin, has handed over department files to federal agents.  Larkin, described as a “close associate of center founders Karen and Philip Berg,” reportedly “helps oversee the Kabbalah Centre's money” in addition to managing the financial affairs of private clients such as Davis.  The Times explains that Larkin

came under law enforcement scrutiny in April after a Times report about his handling of Davis' money. The heiress has spent at least $2.65 million in recent years building a home in Beverly Hills near the Kabbalah Centre despite suffering from what relatives describe as dementia.

Larkin sold her a lot he owned as a site for the home in 2009 for what real estate filings indicate was a $300,000 profit.

According to the story, a probate judge will soon review Larkin's management of Davis' family trust fund, which pays Larkin and another trustee $100,000 a year for investment oversight.  Reportedly, Larkin consented to the making of millions of dollars in loans from the trust for the purchase of the Beverly Hills lot and construction of the Davis house “without disclosing to the probate court, which oversees the trust fund, that he had a personal stake in the project as the seller.”  The story further says that Larkin’s lawyer declined to comment on the expanded federal focus “but insisted Larkin had done nothing wrong.”

JRB

http://lawprofessors.typepad.com/nonprofit/2012/07/federal-investigation-of-financial-manager-associated-with-kabbalah-centre.html

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