Police on Thursday arrested Moshe Hogeg, the owner of the Beiter Jerusalem soccer club, and seven other people on suspicion of involvement in alleged massive fraud related to cryptocurrencies.
Law enforcement said that the suspects stole tens of millions of shekels.
Officers from the Israel Police Lahav 433 anti-corruption unit raided homes and offices belonging to the suspects, gathering evidence and seizing items related to the investigation, police said.
Police said that the suspects operated over a long period of time, “in cooperation and in a systematic manner, while defrauding investors in a number of projects in the field of cryptocurrencies.”
“Each pocketed millions of shekels, while making false presentations to potential investors to invest in seemingly profitable ventures,” police said.
Police said Hogeg is also suspected of having committed crimes entailing sexual and moral turpitude, without further elaborating.
Earlier this month, a well-known model said that Hogeg sexually assaulted her years ago, when she was 17. Channel 13 news cited the model saying Hogeg entered her hotel room and tried to force himself on her, but she managed to fend him off.
She told close acquaintances and her agent about the incident at the time, but the agent — who had business dealings with Hogeg — did not report it to her parents or to law enforcement authorities, according to the report. The model did not file a police complaint.
Hogeg denied the accusation and said the sexual act was consensual, adding that he had taken a lie detector test confirming his version.
In September Hogeg announced that he was selling Beitar Jerusalem, one of Israel’s premier soccer teams, after three years as owner that saw him confront an anti-Arab fanbase and try — but fail — to sell half of it to an Emirati businessman.
Hogeg, a tech entrepreneur and cryptocurrency trader, bought Beitar in 2018 and said he set out to change its culture.
However, he faced backlash from the notoriously racist anti-Arab factions among the club’s fans after in 2020 he said he was selling a 50 percent stake in the club to Sheikh Hamad bin Khalifa Al Nahyan, a member of Abu Dhabi’s ruling family. Al Nahyan pledged to pump $90 million into the team in the coming decade.
Then Israel’s soccer association conducted an investigation that found a potential “significant gap” between Al Nahyan’s declared capital and what he owns in reality, business news website The Marker reported.
After that, the deal fell through.
In May, Hogeg was one of a group of businesspeople sued by former employees of an Israeli venture capital fund who claim that three of Israel’s largest initial blockchain coin offerings of 2017 and 2018 were outright scams. The three ICOs, launched by Sirin Labs, Stx Technologies Limited (Stox) and Leadcoin, collectively raised $250 million from investors around the world.
The plaintiffs claim that none of the three companies ever developed a product as they had promised investors. Instead, the plaintiffs allege, the defendants brazenly appropriated investors’ money for their own personal use.
Hogeg has denied the allegations and said the lawsuit is an attempt by disgruntled employees to extort him.
Before the suspects’ identities were cleared for publication, Hogeg canceled a planned online conference on cryptocurrencies scheduled for Thursday evening. “It’s all for the best,” he wrote in a Facebook post.
Lawyers representing Hogeg said in a statement Thursday that he “vehemently denies the suspicions against him and is cooperating fully with investigators.”
“We are sure that at the end of the investigation it will become clear that there are no grounds to the allegations against him,” attorneys Moshe Mazor and Amit Hadad said.
They also dismissed the allegations as “issues that have been published in the past on behalf of interested parties.”