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Benefit fraud and tax evasion is common practice in Stamford Hill Orthodox Jewish community, High Court hears

Kyverdale Road in Stamford Hill. Picture: Polly Hancock Polly Hancock

Tax evasion and benefit fraud are “on the face of it, common practice” in the Stamford Hill Hasidic community and actively encouraged by community leaders, a High Court judge said in a controversial property hearing.

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The property dispute related to a house in Kyverdale Road. Picture: Polly Hancock The property dispute related to a house in Kyverdale Road. Picture: Polly Hancock

The revelation comes after Miriam Kliers took an unusual property dispute concerning a home in Kyverdale Road, Stamford Hill, to the High Court.

She alleged the house which she and her husband Shlomo bought in 2004 had been put in the name of her younger brother Mordechai Schmerler, so the married couple could fraudulently claim housing benefit.

Despite “misgivings” she agreed to the alleged fraud because of “undue influence” from a “patriarchal body” which included not only her close relatives but community leaders and rabbis, including Mr Kliers’ Grand Rabbi in Israel, their London rabbi and a community adviser, she claimed.

Furthermore, some of the money used to buy the £418,000 property was received as purported charitable donations, it was claimed.

A general view of a Stamford Hill street. Picture: Polly Hancock A general view of a Stamford Hill street. Picture: Polly Hancock

But the money was in fact Ms Kliers’ “disguised” wages to avoid paying tax. She claims that practice is also rife in the community.

Ms Kliers, who separated from her husband and subsequently divorced in 2012, brought the case against him and her brother three years ago. Mr MH Rosen QC has now ruled that 75 per cent of the property belongs to Ms Kliers and 25pc belongs to Mr Kliers.

Mr Rosen said: “On what she has told me it seems to me that the purpose of putting the property into Mr Schmerler’s name, and the tenancy which was also involved, were to obtain funds from the Bank of Scotland as mortgage, from housing benefit, from the London Borough of Hackney and the Department of Work and Pensions, to which there would have been no entitlement had the true state of affairs been fully and frankly disclosed to those third parties.”

While Mr Kliers had been for the most part an unemployed Talmudic student devoted to religious studies, Ms Kliers was the main breadwinner and principal homemaker.

She had saved up £103,800 as a deposit for the house, while Mr Kliers contributed £32,900.

Mr Rosen found she had been an “honest” witness, with “accurate evidence and recollection” about the “disgraceful illegality” which had taken place.

“The pressure which was exerted on her by her father and others, under the aegis or justification of what they were told by the Rabbis should be done, in my judgment did constitute undue influence,” he said.

“This was influence within this particular sect. It was influence which purported to have the backing of religious leadership, incredible though that may sound, and it was influence exerted by dominant males within this family and this society.

“Why senior persons should consider that to be proper it is not for me to say, but there can be no doubt that it is an illegal purpose and contrary to our law and one would have thought to the relevant religious law as well.

“To be confronted by a plan of this nature which, on the evidence, is common practice amongst esteemed and respected religious and community leaders, is one which must cause very great concern to any court seeking to administer the law and the process of justice and legal remedy in this country if not elsewhere.”

The case was said by Mr Rosen to be “one-sided” because Mr Kliers had chosen not to take part, and despite being given many opportunities, Mr Schmerler failed to provide evidence to support his case that the house had been bought with his own money.

But he maintained Ms Kliers provided “extensive and well documented” uncontested evidence, through employment and savings records, and a journal.

To have refused Ms Kliers the right to 75pc of the house he said would “vindicate the illegal practices and encourage those who initiate and perpetrate them” as well as act as “a discouragement to those who seek to challenge them, albeit over a period of years in which they have to move away from the dominance of the community and have to work through both intellectually and emotionally how they should, for their own identities, deal with these problems”.

Mrs Kliers alleges about £150,000 of housing benefit was illegally claimed, and wants the authorities to be repaid once the house is sold. A further hearing in October will determine what will happen with the property.