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26 alleged forex fraudsters arrested in Tel Aviv in joint investigation with FBI

Suspects detained for allegedly scamming tens of millions of shekels out of victims abroad; parallel arrest raids carried out in other countries

Illustrative: Police at a march in Tel Aviv against Prime Minister Benjamin Netanyahu on October 6, 2020. (Tomer Neuberg/Flash90)
Illustrative: Police in Tel Aviv on October 6, 2020. (Tomer Neuberg/Flash90)

In a joint covert operation with the FBI, the Israel Police arrested 26 people overnight Tuesday-Wednesday in Tel Aviv on suspicion of involvement in alleged massive fraud and money-laundering offenses related to digital forex trading.

The statement said the alleged cryptocurrency crimes involved victims abroad and amounted to tens of millions of shekels.

The arrests were part of a coordinated simultaneous operation by a number of law enforcement agencies around the globe to detain those suspected of financial crimes, police said without giving further details on other locations.

Two of the main suspects, men in their 30s, were brought for a remand hearing at Tel Aviv Magistrate’s Court on Wednesday. The court extended the remand for one of the suspects until Friday, and the other until Sunday.

The detained individuals were not named in the statement, nor was the company for which they apparently worked. Police published a video showing the raid on the office from where the alleged crimes were committed, with workers’ faces blurred out.

According to the statement, the 26 suspects were all residents of central Israel and the victims of the alleged fraud all live abroad.

A visual representation of Bitcoin, at the ‘Bitcoin Change’ shop in Tel Aviv, February 6, 2018. (Jack Guez/AFP)

Police said the investigation began with a report from the United States that a group of Israelis was defrauding dozens of people to the tune of tens of millions of shekels under the guise of cryptocurrency financial transactions. The suspects were said to be allegedly marketing ostensible products and investments, but not providing them, and keeping the victims’ money.

Israeli detectives located the Tel Aviv office from which the fraud was allegedly committed against US residents, and identified the network of individuals involved.

In addition to the arrests, officers from the fraud unit seized computers and digital storage devices to provide evidence for the investigation.

According to Channel 12 news, most of those arrested have claimed no knowledge of any alleged fraud. The company was said to have attracted workers with promises of high salaries for those who were committed to working hard.

Israel has been a major hub of online investment scams, which also operate from Cyprus and throughout Eastern Europe.

When the binary options industry was outlawed via Knesset legislation in October 2017, largely as a result of investigative reporting by The Times of Israel that began with a March 2016 article entitled “The wolves of Tel Aviv,” some scammers shifted to schemes involving forex trading or cryptocurrency speculation.

Israeli law enforcement officials have prosecuted almost no online investment fraudsters, despite the fact that the industry has employed thousands of Israelis who have defrauded billions of dollars from victims worldwide.

Simona Weinglass contributed to this report.

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