Sunday, June 16, 2019

On the closing of the American Hebrew Academy

2013's IRS form 990 shows $90,521 in debt at the beginning of the year, and $4,066,634 at the end, rising $3,976,113 in one year while Glen Drew made $402,549 in total compensation.

2016's IRS form 990 shows $538,362 for Drew with $25,927,918 in liabilities at year end.
.
.
"Glenn Drew, executive director of the American Hebrew Academy"

2019
.
.
"Glenn Drew presently serves as CEO and General Counsel at the American Hebrew Academy. The Academy is the only international Jewish college prep boarding school in the world. Mr. Drew is a founding member of the Academy's Board of Trustees and has been the principal most responsible for the $150mm development, construction and operation of the Academy since it's opening in 2001.

From vision planning, through construction to operation, Glenn Drew has overseen every aspect of the American Hebrew Academy's development including design and implementation of the 100 acre campus master plan, strategic operations, national accreditation, fiscal oversight and student recruitment. During his tenure international student recruitment has grown by fifty percent and over forty million dollars has been raised in philanthropic gifts. Tuition revenues have more than doubled."

LinkedIn
.
.
"An email to faculty and staff from Glenn A. Drew, the school’s CEO, and Leeor Sabbah, chair of the school’s board, announced the closing.

Tax records also show that the school’s liabilities had ballooned over the years, from about $1.5 million in the fiscal year ending in 2011, to over $25 million in the 2017 filings."

Fast Forward
.
.
"Fortress Re Inc. was an American aviation reinsurance agency, based in Burlington, North Carolina, and co-owned by Maurice 'Chico' Sabbah.

Their auditor was Deloitte & Touche.

Legal actions began from a number of Japanese insurance companies at the start of 2002 towards the directors of Fortress Re, alleging Fortress Re had misrepresented losses and performed other improper acts, including Sabbah and his partner "amassing personal fortunes" by skimming money off the top from Sompo’s funds. Sabbah denied any wrongdoing.

In 2004, the two directors of Fortress Re were collectively forced to pay $1.12bn by a court in New York, for defrauding Sompo Japan Insurance.

Maurice Sabbah was the donor of a reported $100 million to American Hebrew Academy in Greensboro, North Carolina. Japanese insurers who were covered by Fortress Re reached an agreement in their effort to recover some of their losses by suits against the Hebrew Academy. The specifics in regard to the settlement remain undisclosed."

https://en.wikipedia.org/wiki/Fortress_Re
.
.
N.C. Hebrew academy settles lawsuits: funder accused of diverting $100 million of 9-11 money to school

Tuesday, January 11, 2005
N.C. Hebrew academy says it's settled lawsuits
Associated Press [Actual source unknown, as the story appears to have been wiped by AP]

GREENSBORO, N.C. - An elite Jewish prep school said it has settled lawsuits by three Japanese insurance companies squeezed by the terror attacks of Sept. 11, 2001, a settlement its founder says leaves the academy's future secure.

Officials at American Hebrew Academy on Monday announced a settlement that "quiets all pending claims" against the school, yet allows the academy to keep "a significant financial endowment."

...For nearly two years, the school had been entangled in a billion-dollar fraud lawsuit that involved Sabbah, business partner Kenneth Kornfeld and their aviation reinsurance company, Fortress Re.

Fortress Re managed a risk-sharing insurance group for the three Japanese companies, which paid Fortress Re management fees in addition to premiums to cover potential claims.

Fortress Re was the reinsurance manager for the four airplanes hijacked and destroyed on Sept. 11, 2001.

The three Japanese companies claimed they couldn't pay the estimated $3 billion in losses related to the attacks because Sabbah and Kornfeld kept hundreds of millions for themselves instead of saving it to cover claims.

In December 2003, an arbitration panel awarded the companies $1.12 billion, finding that Fortress Re engaged in fraud and "wilful and deliberate misconduct." Sabbah and Kornfeld settled last year for $400 million.

The Japanese companies also claimed Fortress Re wrongly diverted about $100 million to the academy, a lavish, state-of-the-art boarding school where tuition is $15,000.

BusinessWeek magazine estimated Sabbah's donations to the academy at $100 million when the publication named him to its list of the 50 most generous American philanthropists in 2003.

The school had assets of $127 million in June 2003. Officials haven't disclosed the amount in the endowment.

Glenn Drew, Sabbah's nephew and former attorney for his business, has been named the academy's interim executive director.

...According to BusinessWeek, Sabbah donated $100 million from 1999 to 2003 -- primarily to Greensboro's American Hebrew Academy

...They artificially inflated the financial picture of Fortress Re in several ways. First, it is alleged that Mr Kornfeld and his partner purchased financial reinsurances which transferred no risk, and failed to account for the reinstatement premiums related to them. Second, they ceded 25% of all assumed risk (along with the accompanying premium) to Carolina Re, a Bermuda vehicle which they owned. Carolina Re owes Fortress a large fortune, but the bankrupt company has capital of just $62m. Mr Kornfeld and his associates were alleged to have siphoned away its earnings through dividends payable to themselves.

...Fortress Re itself paid out hundreds of millions in unwarranted profit commissions, the arbitrators found. They were unwarranted because Fortress Re did not, in fact, make any profits. Sompo accused Mr Kornfeld and Mr Sabbah of extracting about $408m from the business in this way. Sompo attorney Elizabeth Sandza said in court: "This is not an ordinary commercial dispute. A few individuals skimmed off hundreds of millions of dollars from the pool." Fortress Re's lawyer countered with the claim that Fortress Re had paid profits of nearly $2bn to the Japanese pool backers over the years, but now that losses were due, they were crying foul.

Both parties appear to have been at fault. While the documents which Fortress Re sent to its pool members were incomplete, non-standard and misleading, the Japanese backers of the pool were naive in failing to demand better disclosure, and should have realised that the business Fortress Re was writing could only be uneconomic in the long run (and indeed, had they asked any aviation reinsurer other than Kenny Kornfeld or his colleagues, they would have been told as much).

http://jewishwhistleblower.blogspot.com/2005/01/nc-hebrew-academy-settles-lawsuits.html
.
.
"Glenn Drew, Sabbah's nephew and general counsel of Fortress Re, says the Japanese companies got all the information they requested and that Fortress and Carolina played by the rules."

Ed Cone
Sep 30, 2002
.
.
NEW GARDEN LAND TO HOUSE JEWISH SCHOOL
by JUSTIN CATANOSO Staff Writer
Greensboro News & Record
February 6, 1998

A quarter of Jefferson-Pilot's New Garden property will become home to a private Jewish boarding school.

A private Jewish boarding school for high school students is being planned for 100 acres of Jefferson-Pilot's high-profile New Garden Road property, with the land purchase made possible by a small group of anonymous donors from Greensboro's Jewish community.

..."This is a one-of-a-kind school," said Glenn Drew, a lawyer and spokesman for the group. "While you can search this country and find parochial schools for different religions, to the best of my knowledge you cannot find a traditional boarding school for the Jewish faith."

..."The design of the campus will be truly a parklike setting with a significant emphasis placed on preserving the natural areas," Drew said. "We will keep natural buffers around the perimeter of the property, and access will be limited to one or two entrances."

...Drew declined to identify the Greensboro donors underwriting the land purchase and founding of the boarding school. He also declined to disclose the land purchase price.

However, because JP sold the 100 acres at market value, it's likely that land costs alone exceed $5 million, based on the overall estimated value of the JP's New Garden property.

"In the Jewish tradition, the highest form of charity is to give anonymously," said Rabbi Fred Guttman of Temple Emanuel in Greensboro, who has been consulted about the project. He said the donors are committed to remaining anonymous.

...About 18 months ago, the Greensboro group began looking for land in both the city and county. Greensboro attorney Jim Phillips later assisted the group in its search.

About a year ago, Drew said he approached Jay Yelton, JP's chief investment officer who was leading the negotiations with the New Garden residents. They discussed some options, but Yelton and Drew did not begin seriously discussing a land purchase until last fall.

...With a signed contract to buy the land, Drew said the American Hebrew Academy is now turning its attention to developing policies and curriculum for the school, and how to develop the land. A preliminary search for a headmaster is under way.

...Although no market studies have been done to gauge the demand for a Jewish boarding high school, Cook, of B'nai Shalom, said attracting students should not be difficult.

-----------------

ON THE BOARD

Board members of American Hebrew Academy Inc.

Glenn Drew, attorney, Fortress RE Inc.

Bill Cassell, private developer, Cassell Properties

Victor Ackerman, retired furniture executive with Bernards Inc. of High Point.

Freddy Robinson, certified public accountant, Bernard Robinson & Co.

Chico Sabbah, chairman, Fortress RE Inc.

Rabbi Eli Havivi, Beth David Synagogue

Rabbi Fred Guttman, Temple Emanuel
.
.
The Japanese insurers accused Kornfeld and Maurice Sabbah of Greensboro, partners in a company called Fortress Re, of bookkeeping irregularities in managing a risk-sharing insurance pool that consisted of three Japanese companies and a Fortress Re subsidiary, Carolina Re.

...Besides allegedly paying themselves exorbitant fees and commissions to manage the pool, Kornfeld and Sabbah, in the words of one lawyer for the Japanese insurers, allegedly “skimmed’’ an estimated $400 million in premiums paid to Carolina Re. Carolina Re lacked money to pay its

$600 million share of Sept. 11 losses and several other claims against the pool. The Japanese insurers had to cover Carolina Re’s losses.

...It’s also not clear why Sabbah, who also has repeatedly declined interviews, chose to base Fortress Re and Carolina Re in Burlington rather than Greensboro where he lived.

Kornfeld and Sabbah made no attempt to become part of Burlington’s corporate community. They didn’t join the Chamber of Commerce and other civic groups...

...as the 1980s gave way to the 1990s, the company developed a new system that increased fees and commissions. Fortress Re quietly became one of the major players in international aviation reinsurance, although few people in Burlington or Greensboro knew it existed.

In 1992, according to Insider Quarterly, Fortress Re revenues had zoomed to $584 million and profits to $145 million — of which $60 million was Sabbah and Kornfeld’s share..."

https://www.greensboro.com/news/general_assignment/fortress-re-s-kornfeld-had-fast-rise-faster-fall/article_23c280f8-45f2-5f2c-8ed5-cbf30dba31ee.html
.
.
REINSURER COMPLETES 3 PARTIAL PAYMENTS ; JAPANESE COMPANIES HOPE TO SETTLE WITH FORTRESS RE BY LATE FEBRUARY, A LAWYER SAYS. 

by Margaret Moffett Banks Staff Writer 
Greensboro News & Record
February 4, 2004

Six weeks after losing a $1.1 billion arbitration award brought by a Japanese insurer, Fortress Re has paid $265 million to that company and two others. 

...Glenn Drew, Fortress Re's attorney, declined to answer questions Tuesday, including whether the company or its owners - philanthropist Maurice "Chico" Sabbah and Kenneth Kornfeld of Greensboro - paid the $265 million. 

In December, an arbitration panel in New York ruled that Fortress Re engaged in fraud and "wilful and deliberate misconduct" when doing business with Sompo. The $69 million Fortress Re has paid to Sompo represents only 6 percent of the $1.1 billion arbitration award. 

...The Japanese companies claim the tragedy revealed years of deception by Fortress Re: It couldn't pay those losses because Sabbah and Kornfeld kept hundreds of millions for themselves instead of saving it to cover claims. 

Sompo and the other Japanese companies claim Sabbah funded the school with their money, which explains why the school is named as a defendant in various lawsuits. 
.
.
By 2004, Maurice "Chico" Sabbah and his family had given nearly $53 million to the Oklahoma foundation, all earmarked for the American Hebrew Academy in Greensboro. And by then, the Oklahoma City Community Foundation was entangled in a billion-dollar fraud suit. 

The arrangement, revealed in documents filed in the fraud case, shows the lengths to which Sabbah would go to protect his privacy. Though anonymous giving is common, Greensboro is more accustomed to millionaire-philanthropists named Bryan, Sternberger and Cone, who routinely attach their names to their legacies. 

..."It's only as a result of unwanted publicity in the past few years that Mr. Sabbah's philanthropic activities have become public knowledge," said Sabbah's nephew, Greensboro attorney Glenn Drew. 

...The Oklahoma City Community Foundation and the American Hebrew Academy were named as defendants in the suits, though not because those organizations were accused of any wrongdoing. The Japanese companies claimed Sabbah gave the nonprofits tens of millions that rightfully belonged to them. 

...Drew, who also is an attorney for the Sabbah Family Foundation and the Hebrew Academy, attributes that to a Jewish tenet strongly emphasizing silent charity. Sabbah believes that "through anonymous giving, no person in need of charity or who has requested help from others be beholden to those who are more fortunate and willing to give to his fellow man," Drew said. 

That's what he tried to do with the American Hebrew Academy. When trustees announced plans to build the nation's only non-Orthodox Jewish boarding school, they cited a small group of anonymous donors in Greensboro's Jewish community. 

In fact, Sabbah was bankrolling the academy almost single- handedly, while laying out a rigorous plan for Jewish education in Greensboro. 

It was his deep love of his Jewish faith and tradition, and a fear that fewer and fewer young people were embracing it, that inspired him, his daughter, academy spokeswoman Leeor Sabbah, told the News & Record earlier this year. 

...In 1999, Nancy Anthony received her first call from Freddy Robinson, the accountant who handled business for the Sabbah Family Foundation. 

Anthony later learned Robinson had arranged a similar deal with the California Community Foundation in Los Angeles, which tax records show received at least $31.4 million from Sabbah's charity. It's not clear through court records where that money went. 

By October 2000, Anthony and the Oklahoma foundation were able to meet Robinson's requirements for establishing a fund: a multimillion- dollar gift, a private fund manager and, above all, anonymity. 

Robinson, who said he hasn't read Anthony's deposition, declined to comment. 

In her deposition, Anthony said Robinson's objective was to lessen the Sabbah foundation's "visibility in the Greensboro community for the size of its assets." 

...Robinson actually established five anonymous funds for Sabbah in Oklahoma: A $20 million endowment for the academy and four temporary funds for end-of-the-year donations. For three years, Sabbah and his family gave $32.7 million to the temporary funds in late December. In early January, the foundation would donate the same amount to the academy.