Regulator recovers Jewish charity’s £2.1m loaned to trustee’s private company

The Charity Commission has issued a damning report into a Golders Green charity which loaned £2.1 million to the private company of its only trustee at 24 percent interest.

An inquiry into the Reb Moishe Foundation was opened in November 2014 after the charity’s accountants suspected wrongdoing and notified the Charity Commission, which opened a compliance case.

This week the Commission said the loan was made by the charity to the “elderly” trustee’s commercial company in March 2006, when the trustee was acting as secretary. At the time, they were in essence the only acting trustee.

In its report, the inquiry said it “considered that the charity’s trustees had placed the charity’s funds at risk,” and that it had “failed to take sufficient steps to protect the charity’s interests or recover the charity’s assets particularly since the expected returns from the loan did not materialise”.

Trustees were further found to have “not discharged their legal duties in terms of the governance and administration of their charity” and the annual returns were found to be “false or misleading”.

The report said: “Trustee A had advised that the charity had relevant policies and procedures in place… During the course of the inquiry it was established that no such policies existed.”

The report’s authors say the Commission and the trustee “came to an agreement” regarding the repayment of the loan in July 2015, based on the proceeds of six property sales, but 18 months later the trustee had still not paid, and began a process of appeals against the Commission’s Orders. Finally, in September last year, the full amount was recovered.