Los Angeles Kabbalah Centre to help with tax probe

Associated Press/May 6, 2011

Los Angeles - The Kabbalah Centre, a proponent of Jewish mysticism that has attracted Madonna and other celebrities, said Friday it will cooperate with a government tax investigation.

The nonprofit Los Angeles-based center and one of its charities, Spirituality for Kids, received federal government subpoenas concerning tax-related issues, the center said in a statement.

It will cooperate and intends to work closely with the U.S. tax agency, the Internal Revenue Service, the statement said.

A federal grand jury in New York also is involved in the investigation, according to subpoenas cited by the Los Angeles Times.

Madonna chaired the board of Spirituality for Kids and donated more than $600,000 to the cause, according to tax filings cited by the Times.

The subpoenas do not indicate that she personally is under scrutiny, the newspaper said.

One of the singer's charities, Raising Malawi, also is under investigation in the tax matter, even though it cut ties to the Kabbalah Centre this spring.

"Raising Malawi is actively cooperating with all investigations and will continue to do so," Madonna's publicist, Liz Rosenberg, told The Associated Press in an email saying it would be her only comment.

The Kabbalah Centre has been controlled by the Berg family for more than 40 years and has grown into an international organization that has drawn celebrities such as Ashton Kutcher and Gwyneth Paltrow.

The Times indicated the center might have assets of $260 million.

The center is run by chief executive Karen Berg, 68, with the help of sons Michael Berg, 37, and Yehuda Berg, 38.

The federal investigation follows several court actions involving the center's finances. A trustee sorting out a $68 million fraud scheme in a New York bankruptcy court has demanded the center return $2.9 million it received as an investor in what turned out to be phony financial scheme.

Settlement talks were ongoing.

Heiress Courtenay Geddes filed two lawsuits against the center earlier this year. One claims the Bergs and others connected to the center defrauded her of about $1.3 million. The other alleges Geddes contributed $500,000 for a homeschooling program that never was created.

Geddes' attorney argued in February that the center and its related organizations exist primarily to enrich the Berg family.

The Kabbalah Centre has called the lawsuits meritless.

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