Bad Investments, Tax Evasion

By Dan Rattiner

03/06/2009

A New York City investment advisor named Evelyn Litwok has been accused of insurance fraud in a case involving a house she owns in East Hampton.

Litwok's house suffered water damage last autumn. As a result, she told her insurance company that she had receipts for more than $80,000 that she had to pay because of the damage. She wanted the insurance company to reimburse her.

Among the receipts she sent the company was a bill, marked paid, from Ruth Kalb, who owns a converted church on Division Street in Sag Harbor. The bill was for her having to flee her house and rent the Kalb guesthouse for a period of time. The amount was $1,700.

At this particular time, Litwok was also being investigated for what was claimed to be about $1 million worth of income tax evasion. Investigators, as part of this investigation, went over to Kalb's house to find that there was no guesthouse there. When asked, Kalb, who under the name Vered owns the Vered Art Gallery, said nobody named Litwok had stayed at any guesthouse on her property and denied ever billing her.

As a result of this, a sting was set up. A friend of Kalb tape recorded a phone call to Litwok about the "guesthouse" and the amount paid. Litwok agreed she had just made that up.

After hearing that, a jury, after a few hours deliberation, convicted Litwok of insurance fraud. Litwok, who was also convicted of income tax evasion, stands to spend up to 54 months in jail.

Her lawyer has announced they are appealing.

Several years ago, Litwok was also sued by actress Lily Tomlin and her partner Jane Wagner, who say Litwok lost $2.7 million of their money. Tomlin and Wagner won that case, and received that money.