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My family (my ex wife, Joanna, and my three children - then 12, 9 & 5) and I moved to Israel in the summer of 1984. We originally planned to stay in Israel for 1 year for the “Israeli Experience”. My ex wife was a “closet” Zionist and had much family on a Kibbutz near Hertzalia. It was an exciting idea to me.

We settled in a small community of townhouses and single family homes called Gulag Poleg, near Hertzalia. We rented a 4 Bedroom townhouse with a beautiful garden and a view of the sand dunes behind the house. It was wonderful on many levels. The community was nestled by the Mediterranean sea with an large outdoor pool overlooking the sea. Families were everywhere. We called our children “butterflies” - they went where ever they wanted whenever they wanted in this “secure” community - even our 5 year old son.

We made many new friends and became best friends with a family across the street - the Rosenberg’s. Schmulik Rosenberg was a lawyer, his wife, Shula, went to finishing school and spoke 5 languages and their 3 children were about the same age as ours. We became inseparable spending most Shabbats together, visiting with each other often in all combinations of family units, traveling together, etc. When Shula was suffering with cancer, Joanne would drive her to Jerusalem twice a week for chemo. Schmulik & I became “best friends”. In fact, Schmulik once told me I was the best friend he ever had and I felt the same of him. He also was our lawyer in Israel. Schmulik & I would often talk of my business in New York.

After the 2 year lease expired the owner wanted to sell the house. After the first year in Israel, we decided to stay, but I had to start traveling back and forth to the US frequently. Everyone was very happy in Israel, so I wanted to buy the house. Mortgages were not readily available in Israel and most houses are bought for cash or with government loans. Our house was too big for a government loan and the price was more than I could afford to have tied up in a house in Israel. I spoke to Schmulik about the situation and about a mortgage from one of his clients. Rosenberg & I discussed it and he told me his mother in law, Rose Wolfstein, would put the money up for the mortgage. She was, in 1986, an “elderly” widow with one child, Shula. She was a holocaust survivor. She lived in Frankfort, Germany and traveled to Israel often. Schmulik had her Power of Attorney, as far as I knew.

We discussed terms and I agreed to pay her the same rate I had paid for secondary financing on properties I was buying in the US, 16%. He asked what other assurance I could give him and, thinking that I would have control over the situation if I ever needed to sell the house, agreed that if I should default on the mortgage there would be liquidated damages of $25,000 and a default interest rate of 2% per month. Although Schmulik was our attorney in Israel he never suggested I get my own attorney in creating this agreement. Attorneys in the US have insisted on other matters I have been involved in here that each party be represented by their own attorney. Whether this interest would be annual at 24% or cumulative, at 2% per month, was not addressed, I do not believe, in the documents signed. He has chosen, and, apparently, the court in Israel has condoned 2% per month, cumulative.

As I had to spend more and more time in the US, I finally convinced my wife to move back. The move was in the summer of 1987. She, and, therefore, the kids were miserable in Roslyn, where we lived. She longed to return to Israel and did so in the summer of 1989. The real estate market in the US was beginning to falter at this time and it became more and more difficult to travel to Israel. I was“ estranged” from my family and insisted she return or I would file for divorce. She refused to return.

Soon thereafter, around the fall of 1989, I came under serious financial pressure as I had a large mortgage payment on the house in Roslyn and a large payment on the house in Israel and the real estate market was falling apart in the US. I was running out of cash reserves. Brownstones I had been purchasing, mostly in Bed-Sty and Crown Heights, Brooklyn, which in the past I could sell at a profit, were now not selling. A number were 3 family brownstones with 3 tenants and 2 not paying rent (the NYC Housing Court “option”!). This added to my financial pressure and I knew some action had to be taken. I was no longer able to sell the house in Roslyn, as there was no market. In addition, my older daughter Robin, I and were living there (we had to live somewhere!). I begged my then “estranged” wife to let me sell the house in Israel as the market was still strong and she and the kids could move to a similar rental house in the neighborhood for $1,000 per month.

The loan to Wolfstein would have been paid off with some money left over. She was scared, confused, ill advised and refused. Because of my running out of cash quickly and my greatly reduced income, I told her I would have to stop making mortgage payments on one of the houses. I did not want to do that in the US as it would effect my good credit. Our relationship became “strained” (this is probably polite), divorce ensured and she continued to live in the house in Israel. I spoke and wrote to Schmulik about assisting in selling the house either legally by starting a foreclosure or talking to Joanne to convince her to move &/or allow the house to be sold. He refused to “get involved” in our personal family problems. He also refused to foreclose. Greed, not kindness, was what motivated him in the end. The “friendship” took on a different tone. JoAnne continued living in the house in Israel and traveled to the US to a court trial for our divorce.

A few years had past and Schmulik had become very mean in his attitude. I was only traveling to Israel for 4 day weekends every few months and generally did not see Schmulik anymore. He started threatening JoAnne and the kids that they had to leave the house (even yelling at them that they could live on the street if they had to). My kids, especially my middle daughter, Fredricka, who was graduating high school that year and had planned to go to University in Israel, became scarred and, eventually, she suffered epileptic seizures. I have been told that stress can exasperate seizures. I believe the emotional abuse by Schmulik did. Although she has graduated with a Master’s Degree from Columbia University School of Social Work and has a wonderful job with a highly respected DC “agency” for the poor, she continues to suffer from the trauma of “the move back” to the U.S.

My ex-wife eventually decided she would move out of the house to make a sale easier. She rented an apartment to move to for about $1,000 per month. She had to get two guarantors - this is common in Israel. Schmulik was her lawyer as well as the lawyer for the owner of the house. Soon after she rented the apartment, and before she moved in, she realized she could not stay in Israel and planned to return to the US. She found a good tenant to sublease the rented house and had to get permission from the owner. The owner lived out of the country and had their attorney, Schmulik, make decisions. He refused this subtenant or any other. He allowed the rent to not be paid for the 2 years of the lease and then sued the guarantors who had to make payment! I paid one back who came to me!

Rosenberg found out the family was leaving Israel and he got a court order preventing them from leaving. All furnishings and personal belongings were in a container to come to the US. He “confiscated” and took possession of the container and none of our possessions were ever returned. This caused further trauma, particularly to Fredricka. Upon returning to America, she suffered serious, life altering physical and mental reactions that required medication. She was "out of commission" for nearly two years. All personal belongings including photo albums, clothes, art, silver, etc. were lost to Schmulik Rosenberg. They eventually “escaped” Israel with a new “fiancée” of Joanna’s who posted a $75,000 bond, which, I believe, Schmulik also got.

The house in Israel was eventually sold and the entire principal borrowed was repaid in addition to funds above the original principal balance as the house was sold for more than the debt. Information on the sale was from friends in the neighborhood. I never received any closing statement or other information on the sale from Rosenberg, “my” attorney. The sale was made directly by Rosenberg, as attorneys in Israel often act as “brokers” in the sale of real estate in Israel, and he controlled the situation. Rosenberg’s reprehensible behavior did not end here. He wanted the $25,000 and the 2% per month interest that had accrued since I stopped making mortgage payments, which was quite a few years by that time. He filed for a deficiency judgment in Israel.

I got an attorney to represent me in Israel. It turned out that I had to travel to Israel to defend the case. We made a request to the court that I be assured by the court that if I did travel to Israel I would not be held there, which is the case in Israel, even when a “pending” judgment is presented to the courts. They refused to give me this guarantee. I could not travel to Israel and risk not being able to return to the US and possibly loose my business here. A default judgment was entered in Israel in 1994, I believe, for an amount, I think, of about $180,000. I had no opportunity to review in any way the calculations. Whatever Rosenberg said was accepted by the Court and I could not be there! It is unclear if the $75,000 he received &/or the value of our belongings, as well as other issues were ever recognized.

Rosenberg tried to have the judgment docketed in the U.S. about 5 years ago and was unsuccessful because of improper service. He served me again about 5 months ago and the case was just decided in his favor, on a purely technical basis, hinging on a US case called Mellon. Apparently, after their submission of their initial motion, they presented an affidavit I submitted in Israel after they received the default judgment. My attorney who handled the litigation here claims it was submitted improperly, legally, and should not have been considered by the judge. He also feels the substance of the decision is wrong and an appeal would be appropriate. Legalese - I might have dotted my i a little to the left, so I might owe $1 million! The judge felt the affidavit did subject me to Israel jurisdiction and granted the right to have the judgment executed here. Rosenberg claims the amount due, with interest, accruing at 2% per month, cumulatively, is now $1 million! A genius - creating $1 million from nothing!

It should be pointed out that Wolfstein, the plaintiff, and Schmulik Rosenberg are “one in the same”. Ms. Wolfstein’s daughter, Shula, died of cancer about 10 years ago therefore, her only family is her 3 grandchildren and her son in law, Schmulik.

My ex-wife, who recently completed law school, passed the bar in DC, but works in private industry, suggested that she believes a suit for malpractice against Rosenberg would be successful. This is being reviewed now by attorneys in Israel and here.

A True Story
by Donald Weiss
February 2004