The Kabbalah Centre lawsuits span more than a decade and cover four main fronts: donor fraud claims from former followers who say they gave large sums for projects that never materialized, a sexual misconduct verdict against former co-director Yehuda Berg, a federal wage-and-hour class action brought by former workers, and a bankruptcy trustee’s clawback tied to a Ponzi scheme. Running alongside the civil cases, the IRS opened a criminal investigation in 2010 into whether nonprofit funds were funneled to the Berg family. Outcomes have varied: some plaintiffs won at trial, some settled, some were pushed into arbitration, and the federal probe has produced no public charges.
Donor Fraud Suits Over Projects That Never Materialized
Several former donors have sued the Kabbalah Centre alleging they were pressured into large gifts for programs and buildings that never came to be.
Courtenay Geddes
In February 2011, heiress Courtenay Geddes filed two suits in Los Angeles Superior Court claiming the Centre and the Berg family defrauded her of about $1.3 million. She said roughly $500,000 went to a homeschooling program that was never created, with more lost in a linked real estate deal. The suits sought $20 million in damages and alleged a “historical pattern and practice of defrauding people by soliciting monies for various projects that never come to fruition.”1The Hollywood Reporter. Los Angeles Kabbalah Centre Under Scrutiny2Showbiz 411. Madonnas Kabbalah Sued for $20 Million The case eventually settled on undisclosed terms.3LA Weekly. Kabbalah Centre and Its Former Rabbi to the Stars to Pay $177,500
Carolyn Cohen and Randi and Charles Wax
In November 2013, San Diego real estate broker Carolyn Cohen and business owners Randi and Charles Wax sued the Centre over a combined $904,000 in donations. Cohen said she gave $452,000 to a fund meant to build a permanent Kabbalah Centre in San Diego and $25,000 to Spirituality for Kids. The Waxes contributed $326,800 to the same building fund. Neither the building nor the children’s program was completed.4Los Angeles Times. Kabbalah Centre Donor Lawsuit5Courthouse News Service. Donors Accuse Kabbalah Centre of Fraud
The plaintiffs alleged that teachers were trained to press followers “to give money until it hurts” and to threaten spiritual harm to anyone asking for a refund. They sought restitution and punitive damages exceeding $40 million collectively. The Centre called the suits “frivolous.”4Los Angeles Times. Kabbalah Centre Donor Lawsuit
The Centre tried to shut both cases down early with anti-SLAPP motions, arguing that its fundraising was protected speech. The trial court denied the motions, and in April 2016 a California appeals court affirmed. The appellate court drew a line between charitable solicitation in general, which is protected by the First Amendment, and specific allegations of fraud and breach of contract, which are not. It found that the Centre’s promises to these individual donors were “private communications” and did not become public-issue speech just because the Centre is a large religious organization.6CaseMine. Cohen v. Kabbalah Centre International, B258226
Cohen’s case returned to the California Court of Appeal in 2019. The court upheld dismissal of most claims, including fraud, finding that the Centre had shown a sincere, multi-year effort to buy a San Diego building. Cohen herself had served as the Centre’s realtor, scouting dozens of possible sites, and could not prove intent to deceive. One narrow claim survived: because Cohen produced evidence of a possible oral agreement to return her $25,000 Spirituality for Kids donation, the court sent that breach-of-contract question back for trial. The California Supreme Court declined review in July 2019.7FindLaw. Cohen v. Kabbalah Centre International, 36 Cal.App.5th 1032
The Yehuda Berg Sexual Misconduct Verdict
In 2014, former follower Jena Scaccetti sued Yehuda Berg and the Kabbalah Centre in Los Angeles County Superior Court. She alleged that on October 25, 2012, Berg invited her to his mother’s home under the pretext of healing her kidney stones, gave her Vicodin and alcohol, and touched her without consent. She also alleged Berg used her cellphone to take an inappropriate photograph and, when she resisted, threatened to “fucking kill you” if she reported him.8Courthouse News Service. Woman Says Rabbi to the Stars Drugged, Threatened to Kill Her
The case went to trial in November 2015. The jury rejected the battery claim but found Berg liable for intentional infliction of emotional distress and determined he had acted with malice, awarding $85,000 in compensatory damages and $50,000 in punitive damages. The jury separately found the Kabbalah Centre negligent in its supervision of Berg and ordered it to pay $42,500. The total award came to $177,500.9Los Angeles Times. Kabbalah Centre Lawsuit Verdict10Jewish Telegraphic Agency. Ex-Kabbalah Centre Exec Must Pay $177,500 in Damages
Both Berg and the Centre appealed. Scaccetti briefly cross-appealed and then dropped it. In November 2018, a California appellate court affirmed the entire judgment and denied the defendants’ motions for judgment notwithstanding the verdict.11CaseMine. Scaccetti v. Berg, B276155 By the time of the 2015 verdict, Berg was described in reporting as the “former co-director” of the Kabbalah Centre.12Times of Israel. Ex-LA Kabbalah Centre Exec to Pay Woman He Assaulted
The Greene Unpaid-Labor Class Action
In July 2019, seven former employees filed a class and collective action in the U.S. District Court for the Eastern District of New York against the Kabbalah Centre, several affiliated entities, and Karen, Michael, and Yehuda Berg. Greene v. Kabbalah Centre International, Inc. alleged Fair Labor Standards Act violations and described what the plaintiffs called a “vast network of unpaid labor under extreme conditions” that enriched the Centre’s directors.13PR Newswire. Class Action Lawsuit Against the Kabbalah Centre International
The plaintiffs said they had been recruited as early as 1998 and required to work seven days a week, often 16 to 20 hours a day, as personal assistants and household workers for the Bergs. They alleged they were manipulated into giving up outside relationships and possessions to focus on raising money for the organization.13PR Newswire. Class Action Lawsuit Against the Kabbalah Centre International
The defendants moved to compel arbitration and to dismiss. In September 2022, the court ordered five of the seven plaintiffs into arbitration, finding valid arbitration clauses in their signed separation agreements and rejecting arguments that those agreements were coerced. The two remaining plaintiffs saw their claims dismissed as untimely under the FLSA statute of limitations. The case was terminated on September 7, 2022.14Bloomberg Law. Wage and Hour, Fair Labor Standards Act, E.D.N.Y.15CourtListener. Greene v. Kabbalah Centre International, Incorporated Whether the five remaining arbitrations have concluded is not publicly known; the federal docket shows no activity after September 2022.
The Ponzi Scheme Clawback
The Kabbalah Centre also faced a lawsuit as an unwitting participant, not an accused wrongdoer. It had invested $2.1 million in a New York real estate venture that turned out to be a Ponzi scheme. In February 2011, the trustee in the resulting bankruptcy sued to recover nearly $3 million in “fictitious profits” the Centre had received. The Centre was not accused of involvement in the fraud and disputed the trustee’s figures, but settled in July 2011 for $785,000.16Los Angeles Times. Kabbalah Centre Finances
The IRS Criminal Investigation
In 2010, the criminal division of the IRS opened an investigation into whether nonprofit funds were being funneled to the Berg family, a legal concept called “private inurement” that can strip an organization of its tax-exempt status. A federal grand jury in Manhattan began gathering evidence, and IRS agents interviewed people in Los Angeles.17Herald Net. Madonna-Linked Kabbalah Centre Is Focus of IRS Investigation
Subpoenas went to the Centre, its affiliated charity Spirituality for Kids, and Raising Malawi, a nonprofit co-founded by Madonna and Michael Berg. Investigators examined more than a dozen nonprofit and for-profit entities linked to the Bergs. Reporting at the time indicated the subpoenas did not suggest Madonna herself was under investigation.18Los Angeles Times. Kabbalah Centre Investigation
A key whistleblower was Nicholas Vakkur, who served as the Centre’s CFO for three months in the summer of 2010. In an August 2010 email he alleged he had uncovered “instances of income tax fraud” that “could bankrupt several of the directors involved,” sat for a three-hour interview with IRS investigators, and wrote that he had “little choice but to cooperate with the IRS and bring down the entire Kabbalah Centre.”19New York Daily News. Feds Step Up Investigation Into Kabbalah Center in LA The Centre maintained that the Bergs received no salaries, pointing to a 1993 tax-exempt filing, though the organization owns Beverly Hills homes occupied by the family.20Forbes. IRS Stirs the Kabbalah Pot The Centre said it was “actively cooperating in every way.” No public findings or charges have been reported.
Raising Malawi drew separate scrutiny after its planned $15 million girls’ academy collapsed. Of $3.8 million spent, only about $850,000 reached Malawi, and auditors flagged excessive spending on salaries, cars, office space, and a golf course membership for staff.21New York Magazine. Madonna Malawi22The New York Times. Raising Malawi Charity In early 2011, Madonna removed Kabbalah Centre-affiliated members from the Raising Malawi board and fired the executive director. The charity formally cut ties with the Kabbalah Centre in the spring of 2011.23ABC 7 Chicago. Raising Malawi Cuts Ties to Kabbalah Centre
Where the Kabbalah Centre Stands Now
The Centre continues to operate as a tax-exempt church, which means it is not required to publicly disclose its finances. Former CFO Nicholas Boord Jr. estimated the organization held roughly $60 million in annual revenue, a $60 million investment fund, and a $200 million global real estate portfolio.16Los Angeles Times. Kabbalah Centre Finances Michael Berg and his wife Monica now run day-to-day operations; Karen Berg has held the title of Chief Executive, and Yehuda Berg is no longer part of leadership.24The Kabbalah Centre. Rav Berg The civil docket has quieted since 2022, but the arbitrations from Greene remain the last known unresolved piece.