Foreclosure Looms At Monastery

Foreclosure Looms At Monastery;
Lawyers: Ex-abbot owes $ 400,000

Ludmilla Korepin and her family had just transplanted themselves from Leningrad to Long Island four years ago when they saw something on Main Street in East Setauket that eased some of their homesickness.

It was the golden onion dome atop St. German of Alaska Eastern Orthodox Church, and the sight – common in the Soviet Union – was immediately comforting.

Inside the church, the Korepins found icons of saints lining the walls and three monks garbed in black cassocks who told them they would gladly baptize their 8-year-old son, Sergei.

Slowly Ludmilla Korepin, 34, and her husband, Vladimir, 41, who live in Stony Brook, made friends with other parishioners. Ludmilla Korepin learned English, and the couple’s two sons attended Sunday school, going ice skating in Manhattan on field trips with the monks.

“When we came here we were very lonely,” Ludmilla said. “We were looking for someplace where we could meet somebody and spend time. We really found out that the church can be like a second home for us.”

But now, the Korepins and other parishioners are worried about the future of St. German.

Several Philadelphia lawyers are trying to foreclose on the church property as payment for their defense of the church’s former abbot, the Rev. William V. Ischie, who was convicted in 1988 of tax fraud.

Ischie owes the firms about $ 400,000 for his defense on federal charges that he inflated the value of properties donated to his monastery, St. John of Rila, so donors could take unwarranted tax deductions. Ischie served a six-month sentence in a halfway house in 1989 after pleading guilty to one count of conspiracy to commit tax fraud and two counts of helping to file false tax returns.

In December, a Suffolk County sheriff’s auction of the church, parish house and monks’ home on 1.4 acres was canceled after a judge issued a temporary restraining order.

Now, the law firms and the monastery are awaiting a judicial review of the stay of the sale, as well as an appeal of a State Supreme Court justice’s decision saying that one of the firms, which holds the mortgage, is not entitled to foreclose.

At the same time, a Queens lawyer who says he represents the Patriarchate of Jerusalem, which oversees the church and monastery, has made a bid for the patriarchate to buy the property for $ 150,000.

Another factor affecting any sale is the landmark status of the buildings, including the 105-year-old church. Because they are in a historic district of Setauket, the Town of Brookhaven must give its approval before the structures can be altered, moved or destroyed.

By all accounts, the situation is complex. “It’s hard to determine who the bad guys are,” said Allan D. Grecco, a Rocky Point lawyer representing the monastery. “If Cardinal John O’Connor runs up personal debts, should St. Patrick’s Cathedral be sold?”

Ischie, who resigned as abbot last March, shares the house with two younger monks, the Revs. John Erickson and Gabriel Nicholas, who run the monastery and church services. They sell candles they make in a backyard shed and in summer raise bees for honey. The buildings are shabby and in need of repair.

The approximately 50 families who belong to the church are feeling the strain of the legal entanglements and threat of foreclosure.

“We have been praying and crying,” Ludmilla Korepin said. “I was crying when I thought about the sheriff’s sale.”

The parishioners, American-born and immigrants from the former Soviet Union and Eastern European countries, come from all over Long Island to the services, which are held in English.

Elena Polenova, a psychotherapist who lives in Poquott, said she chose to live close enough to the church so that her 15-year-old son, Igor Polenov, could ride his bike or walk there. She and her family have attended services and community gatherings at St. German since they moved here from Moscow 2 1/2 years ago.

Igor said he drops by the church often after school to help the monks with services and to discuss religion and Russian history. “I go there because it helps me a lot when I’m not feeling well or when I’m depressed,” Igor said.

Ischie, who is called Father Paul, opened St. German in 1974, adding the gold onion dome to a church building that had been vacated by St. James Catholic Church. Ischie, a former Episcopal priest in Philadelphia, had resigned from the city’s Zoning Board of Adjustment after it was revealed that he had a financial interest in applications he had been voting on.

In 1977, St. German’s was nearly evicted after falling $ 14,000 behind in mortgage payments and owing $ 9,800 to local merchants. An anonymous donation of $ 14,000 saved it from foreclosure.

During the 1980s, Ischie set up a donation program, placing ads in national publications such as The Wall Street Journal and Fortune magazine that read, “Hard to sell and distressed real estate accepted by religious corporation. Will structure contribution of real estate to meet need of donor.”

The offer apparently met the needs of many donors, including Harry and Leona Helmsley, who deducted $ 545,000 from their 1984 federal income-tax return for contributing 196 acres of property in Putnam County to the Setauket monastery.

According to court papers, Ischie hired about 100 lawyers across the country to handle the donations of property. William H. Blackmore, an appraiser from Sea Cliff, later pleaded guilty to inflating appraisals on property donated to the monastery. After the donors received their appraisals, Ischie often sold the land for a fraction of its appraisal price.

In her decision last year preventing the foreclosure, State Supreme Court Justice Mary M. Werner wrote that the monastery raised about $ 2 1/2 million through the program in 1980-86. But in 1985, Ischie spent only $ 16,000 of a total $ 746,000, for “liturgical” services, while up to $ 253,000 went for legal fees and $ 135,500 for advertising. Werner called Ischie’s program “very profitable, albeit illegal.”

Erickson, who met Ischie as a youth in Brooklyn and followed him into the monastery, said that Ischie did not want to be interviewed.

In the early 1980s, Ischie’s activities caused a stir in Philadelphia when the owners of a landmark plant where Dixie Cups had been manufactured donated it to St. John of Rila. Three days after Ischie got the plant, valued by the donor at $ 2.3 million, he sold it for $ 250,000.

“The real tragedy occurs when the real estate program could have been ended,” Erickson said. “But Father Paul wanted to make it a bigger program. It’s undone a lot of men, the desire to make things bigger. He doesn’t like to think small.”

Two Philadelphia law firms now are fighting for payment for representing Ischie in his tax-fraud case. Frank Corso, a Westbury attorney representing one of the firms, Pepper, Hamilton & Scheetz, said that his client is willing to accept $ 150,000. A second law firm has a mortgage on the monastery that Ischie signed over to it.

Until the decision comes, the two monks are operating the church, saying liturgies and keeping the heat down so the bills stay low.

Erickson said he is confident the church will remain in existence, even if forced out of its quarters.

Meanwhile, Ischie last year took out some more ads seeking property donations, and is willing to accept them at any time, Erickson said. “We always hoped he would wind down a little,” Erickson said. “But he doesn’t want to wind down.”