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LA Kabbalah Centre accused of tax evasion

May 6, 2011 12:00:00 AM PDT
The Los Angeles based Kabbalah Centre may be in trouble with the law.

The Internal Revenue Service is investigating whether the group is guilty of federal tax evasion, and misusing millions of dollars in non-profit funds.

Superstar Madonna, embracing the spiritual teaching of Kabbalah, told the children of Malawi to dare to dream. Her fundraising campaign for a girl's school in one of Africa's poorest countries drew $18 million dollars according to one report in Newsweek.

But that dream is now under a cloud. The organization that partnered with Madonna, the Kabbalah Centre on Robertson Boulevard, confirms that it is under investigation by the IRS. And so is Madonna's organization "Raising Malawi."

Officials declined on camera interviews Friday. So did a former chief financial officer of the centre who is a now turned whistle-blower.

Nicholas Vakkur told the Los Angeles Times that he uncovered instances of tax fraud. Karen Berg heads the center after her husband, the head rabbi, reportedly suffered a stroke in 2004.

In an email shared with Eyewitness News, she tells workers that it is especially painful and disappointing that there appears to be a small group of individuals who are trying to discredit the Kabbalah Centre.

Berg issued a statement Friday: "The centre and success for kids intend to work closely with the IRS and the government, and are in the process of providing responsive information to the subpoenas."

Celebrities including, Ashton Kutcher and Demi Moore, are among supporters who praise the teachings of Kaballah.

"To find balance in professional life," said Kabbalah follower Richard Oelberger. "To build meaningful friendships and lasting community to raise my own children in."

"We choose our destiny," said Kabbalah follower Hugo Schwyzer. "We choose the outcome, and if there is suffering in the world or in our lives, we have an obligation to address that."

Madonna's publicist tells Eyewitness News that "Raising Malawi" is actively cooperating with the investigation. In the meantime it has separated from the Kabbalah Centre and has a new board of directors.

A grand jury in New York is also investigating Kabbalah. The documents during the investigation will remained sealed. The U.S. attorney in L.A. said that there isn't an indictment at this time.