Anglo is accused of 'immoral' conduct during US land deal

[Ognir]

Jewish group claims bank 'preyed on their religious devotion'

By John Mulligan
Friday June 04 2010

Anglo Irish Bank has been accused of "unconscionable and immoral" motivation by a firm tied to an orthodox Jewish group in Florida by declaring an $11m (€9m) mortgage that was used to buy land where a synagogue would be built to be in default.

US court filings seen by the Irish Independent allege that state-owned Anglo Irish Bank has "preyed" on the Jewish group's religious devotion and that the institution said the loan had been defaulted on "in an act of pure spite".

It is alleged the bank wants the loan used to buy the Grove Centre Office development in Boca Raton declared in default because the institution failed to "gain a foothold" in other financial transactions.

The complaint has been filed in a Palm Beach court by a company called Achva Vahava and a charitable body called Congregation Ohev Shalom. They are seeking damages and the enforcement of a lease agreement that would enable the synagogue to be built.

Anglo has until June 25 to respond to the complaint.

Synagogue

Achva Vahava, which is ultimately controlled by Izzy Ashkenazy and his son-in-law Jonathan Agus, says it borrowed the money from Anglo in 2007 in order to buy a plot of already-developed land where it intended to construct an orthodox Jewish synagogue, known as a shul.

The shul would be operated by the other plaintiff in the case, Congregation Ohev Shalom. The local members of the congregation strictly obey the Sabbath and must walk to services on a Friday and Saturday.

It is alleged that Anglo agreed that a portion of the land could later be hived off the mortgaged site and the synagogue built on it.

"Such a release was intended to enable operation of the shul to proceed without any direct financial obligations from the congregation towards the mortgage," the claim alleges.

Anglo previously loaned money for separate projects to Mr Ashkenazy and Mr Agus and currently has a case against them seeking repayment of a $2.6m (€2.1m) loan.

It is claimed that in March 2009 Anglo declared the pair to be in default on other loans.

It is further alleged that Anglo subsequently interfered with a potential sale of property owned by the men, called Cityplace, to related entities by demanding proceeds from it would be used to reduce loans owed to the bank by companies linked to the men.

However, they refused and later signed a "less advantageous" deal to sell the property.

Achva Vahava claims that after realising it would be impossible to subdivide the Grove Centre Office site it agreed a long-term ground lease to allow the synagogue to be built.

Anglo, it alleges, refused to approve the lease agreement because it didn't receive funds from the Cityplace transaction and "wrongly drew issues of religion into a burgeoning commercial dispute".

- John Mulligan

http://www.independent.ie/business/iris ... 07296.html