Haifa court orders seven people to return NIS 1.85 million in donations — Jerusalem Post
The Haifa District Court in Israel ordered seven people who managed two affiliated charitable organizations to personally return NIS 1.85 million. The court found that a donation intended to help children and adolescents with cancer was transferred to another organization and used for purposes other than those agreed upon, The Jerusalem Post reports.
The ruling was issued on October 8 by Senior Judge Ron Sokol. He concluded that the heads of the two foundations had breached their duties by allowing the transfer of funds, submitting misleading reports and failing to ensure proper accounting of the money. The court also found that substantial sums were improperly paid to the organizations’ leading figure, attorney Galit Pouker Shemesh, as salary and rent.
Donation from an inheritance
The funds came from the estate of Helen Hatab, who worked as a teacher and had cancer. The administrator of her estate proposed allocating part of the money to support children and adolescents with the same diagnosis. In March 2019, the family court approved a program providing educational support during treatment, assistance to patients in recovery, and funding for equipment, medicines and treatment through the original charitable organization, Keren L’Chaim.
However, the transfer details belonged to the newer organization, Keren L’Chaim L’Yeladim V’Noar. The family court did not authorize either a transfer to another foundation or a change in the purpose for which the donation was to be used. First International Bank of Israel initially refused to process the transaction because of a discrepancy between the approved recipient and the bank account. The organizations later opened accounts at Bank Mizrahi-Tefahot, where the money was received in April 2019.
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Expenses for a dormitory and payments
The seven defendants claimed that the funds had been used for legitimate charitable activities, including the renovation of Beit Keren, a dormitory for girls at risk in Hadera. They said that about NIS 1 million had been spent on the renovation, but the court found the evidence provided insufficient: there were no proper invoices, plans or expert assessment of the cost of the work.
The court took into account that some of the renovation had nevertheless been completed and deducted NIS 41,621 from the compensation amount, in accordance with the foundation’s financial report. Separately, Galit Pouker Shemesh was ordered to return NIS 180,390 in salary and NIS 112,110 in rent payments. Interest and indexation from April 2019 will be added to these amounts, and the funds she returns will reduce the total amount that the seven people must pay.
The defendants must also pay a total of NIS 20,000 in legal costs. Any one of the seven people may be required to pay the entire outstanding balance. Both charitable organizations were to be closed in 2024.
