Bankrupt Gutnick grilled over debts

Stera and Mordecai Gutnik appearing at the Federal Court in Melbourne. 24th April Photo: Jason SouthBankrupt former rich-lister “Diamond” Joe Gutnick has faced a court grilling over loans to a New York fraudster and Brooklyn-based community organisation.
苏州桑拿会所

In a fiery examination at the Federal Court on Thursday, Mr Gutnick was challenged over the validity of two major debts declared in his bankrupt estate, including a $33 million debt to Nochum Sternberg, a long-time friend who was convicted in 1987 for his role in a $US130 million ($174 million) tax evasion scheme.

Lawyer for creditors also challenged a $10 million loan he received from Machne Israel, a Chabbad community organisation based in Brooklyn.

Raising his voice, leaning over the witness box and pointing at the lawyer for one of his creditors, Philip Crutchfield QC, Mr Gutnick said challenging the loan was outrageous.

“He’s trying to infer this is not a legitimate document,” Mr Gutnick told the court.

“Outrageous, do you want to make something sensational again?” he said.

At the time the loan, which is originated in part with a handwritten slip, was written up in 1988, the organisation was headed up with Rabbi Menachem Mendel Schneerson, a highly revered member of the Chabbad community and the last Lubavitcher Rebbe, the court heard.

In regards to the debt from Mr Sternberg, Mr Gutnick told the court the debt related to services Mr Sternberg provided Mr Gutnick’s companies in winning major investors in his projects.

The court also heard that Mr Gutnick gave Mr Sternberg five signed promissory notes – a document that promises a repayment of money – but left the amount on each note blank.

“We were very close friends. I trusted him,” Mr Gutnick told the court.

Mr Gutnick, who declared himself bankrupt in July last year, was also accused of signing other documents and leaving the date blank so he could use the documents at a later date to structure his affairs so that creditors could not reach his assets.

He denied these allegations.

At times, Mr Gutnick refused to answer any more questions which he took as insulting towards either the Chabbad movement or his wife Stera Gutnick, who earlier in the week was examined by lawyers for Mr Gutnick’s trustees.

“Don’t bring my wife into it. Don’t bring my wife into it any longer … I take offence you are questioning me about my wife all the time. Leave my wife out of it. Ask questions about me,” Mr Gutnick said before being directed to answer the questions.

Mr Gutnick also took a swipe at the media after reports regarding his wife’s involvement in his companies following his bankruptcy, saying she is worth “millions” and is a “diamond”.

“There were disgusting reports in the newspaper,” he said.

On Monday, the court heard that a company linked to the bankrupt mining magnate is paying his wife, Stera Gutnick, $285,000 a year to work “a few hours a day” as a trainee jewellery designer, while her husband earns just $45,000 a year to work full-time.

“She’s worth a lot more than some $200,000, possibly millions,” he said.

“She is herself a very special gem, a diamond,” he added.

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