Los Angeles Times, The Kabbalah Centre in Los Angeles Is the Focus of an IRS Investigation Into Tax Evasion:

The Kabbalah Centre, the Los Angeles-based spiritual organization that mingles ancient Jewish mysticism with the glamour of its celebrity devotees, is the focus of a federal tax evasion investigation probing, among other things, the finances of two charities connected to Madonna, the center’s most famous adherent.

Sources familiar with the investigation said the criminal division of the IRS is looking into whether nonprofit funds were used for the personal enrichment of the Berg family, which has controlled the Kabbalah Centre for more than four decades, a period in which it expanded from one school of a little-known strain of Judaism to a global brand with A-list followers like Ashton Kutcher and Gwyneth Paltrow and assets that may top $260 million. …

The IRS and the U.S. Attorney’s office in New York declined to comment. People with knowledge of the investigation said it began last year and is playing out on two coasts. A federal grand jury in Manhattan, where the Kabbalah Centre has a large branch and real estate holdings, is gathering evidence there, according to the subpoenas. Meanwhile, in Los Angeles, where the center is headquartered on Robertson Boulevard, a team of IRS agents dispatched from the agency’s New York criminal division is interviewing people connected to the organization, said individuals familiar with the agents’ activities.

Among the items that investigators have reviewed, according to one source, is an August 2010 email in which a former chief financial officer of the center complained that he had been fired for pointing out financial improprieties and warned that the center was in danger of “committing suicide.”

“I recently uncovered instances of income tax fraud at the Kabbalah Centre — instances which could bankrupt several of the directors involved … this is very serious business,” the former CFO, Nicholas Vakkur, wrote in an email that circulated among high-level officials at the center. “I have little choice but to cooperate with the IRS and bring down the entire Kabbalah Centre,” Vakkur wrote, adding a plea that “someone in authority” try to “reason” with center Chief Executive Karen Berg.

(Hat Tip: Bob Kamman.)