German prosecutors take aim at Israelis behind 77 million euro fraud ring
Three Israelis and two others given jail terms; extradition requested for remaining suspects in Israel of ‘GetFinancial Group’
Simona Weinglass is an investigative reporter at The Times of Israel.
Three Israeli men, including a Kfar Saba father and son, were recently sentenced to prison in Regensberg, Germany, over their involvement in an online investment scam that prosecutors say defrauded victims out of tens of millions of euros.
Nadav Gover, 35, Yaakov Gover, 62, and Yuri Dashevsky, 35, pleaded guilty to masterminding a criminal ring that defrauded investors around the world out of an estimated 77 million euros ($83 million) from 2015 to 2021.
According to German prosecutors, call centers operated by the so-called GetFinancial Ring in Israel and Europe pressured victims into various investments, but instead of putting clients’ money in the markets, the convicted men used the money to run their call centers and internet trading platforms while keeping the remainder of the money for themselves.
Two non-Israeli operatives, Vadim Tsysaruk and Anna Sokolova, were also sentenced in the scheme. Four other suspects in the case being prosecuted by the Central Office for Cybercrime in Bavaria, all of them Israeli, are fighting extradition from Israel.
In response to a query from The Times of Israel, the German prosecutor hinted that more people might be indicted at a later date.
“No charges have been brought against any other persons. However, our investigations in the entire case are continuing,” said Nino Goldbeck, senior public prosecutor with the Office of the Public Prosecutor General in Bamberg.
The Govers and Dashevsky, of Tel Aviv, pleaded guilty on April 6. Nadav Gover, a leader of the criminal group, was sentenced to five years and nine months in prison as well as a fine of 10.1 million euros. His father, who goes by the name Kobi and was the group’s hardware and software specialist, was sentenced to four years and two months and a fine of 37,200 euros. Dashevsky, who served as a senior executive, was sentenced to four years and nine months and a 1.9 million euro fine.
Tsysaruk and Sokolova were handed 30 months and 40 months in prison, respectively.
Four of the five convicts have appealed their sentences, while Dashevsky’s sentence was final.
“The accused persons are accused of having pretended to unsuspecting citizens from 2015 that they would be able to trade in so-called basic securities such as shares, commodities or cryptocurrencies,” German prosecutors wrote in a November 2021 extradition request for Dashevsky.
The elder Gover owned the Nikodo Technological Services call center in Petah Tikva, while the others operated call centers in Tbilisi, Georgia; Yerevan, Armenia; and Chisinau, Moldova, prosecutors alleged. These call centers operated the websites SolidCFD, ProCapitalMarkets, MyCoinBanking, Coinsbanking GainFinTech, ProfitsTrade, AccepTrade and GetFinancial. The last website, among the ring’s most prominent, inspired the nickname prosecutors eventually attached to it: The GetFinancial Group.
Fake cyber-trading
The GetFinancial Group is one of a dozen or more criminal cells that have targeted German investors and others around the world in recent years. Most of these online investment scams have ties to both Israel and the former Soviet Union, and trace their origins to Israel’s fraudulent binary options industry.
Prosecutors in Bavaria have led a Europe-wide effort to investigate and prosecute the groups, which they accuse of being involved in “fake cyber-trading.” The groups have collectively defrauded investors around the world out of billions of dollars, according to law enforcement officials.
The criminal groups lure in victims through targeted internet advertising, pairing investors with solicitous brokers who cajole them over the phone into investing with an online trading site, coax as much money out of them as possible, and then disappear with their money. In late 2017, the Knesset banned the part of this industry known as binary options, as a direct result of The Times of Israel’s investigative reporting, which began with a March 2016 article entitled “The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed.” Many of the Israeli firms have since relocated overseas and continued the scam.
Kobi Gover was extradited from Italy to Germany in January 2022. His son was extradited to Germany from Slovenia shortly after, while Dashevsky was extradited from Israel to Germany in June 2022.
Four other suspects, Nimrod Blachman, 35, Chen Malka, 32, Pavel Kotler, 49, and David Bar-El, 39, are in Israel, fighting extradition requests from Germany, court filings show.
Of the four, only Blachman’s attorneys, Eitan Finkelstein and Liya Felus, responded to The Times of Israel’s request for comment, claiming he was a low-level worker in the dark about alleged illicit activities.
“Our client worked as an employee at the company for many years after its establishment, and left the company in 2019. Our client did not own the company, did not manage the company, and did not receive anything for his activity in the company, apart from a salary as an employee in the marketing department. The claims regarding illegal actions, if such actions were carried out without the knowledge of the employee level, should be directed to the owners of the company.”
German prosecutors continue to press for the four suspects’ extradition.
“The extradition proceedings in Israel are still ongoing,” Goldbeck said. “We cannot estimate if and when extradition will take place.”
Wider connections
Goldbeck told The Times of Israel that prosecutors had estimated the total worldwide damage of the eight trading websites that were the subject of the GetFinancial Group indictment at 77 million euros, calculated using the firms’ own internal documents. The sum is smaller than other alleged investment scammers that targeted Germans, such as the Milton Group, which is estimated to have defrauded victims out of a billion dollars or more.
While none of the suspects in the GetFinancial case is a household name, German extradition requests, made accessible to journalists in Israel, point to a wider ecosystem of companies and individuals allegedly linked to the scam.
Bar-El, who was a legal adviser for the GetFinancial Group, was accused by an employee of boasting about his relationship with his father-in-law Shota Shalelashvili, who served in Georgia’s parliament as a member of the Georgian Dream Party from 2016 to 2019. He also hinted that he had ties to Georgian billionaire Bidzina Ivanishvili, who founded the Dream Party.
He “threatens our lives with his ‘influential’ relatives,” the employee alleged in documents included in the German extradition request for Bar-El, adding that “in Georgia [Bar-El] actively used the names of MP Shota Shalelashvili and Bidzina Ivanishvili as a means of manipulation.”
Shalelashvili’s former lawyer said he is not in Israel and that he did not know how to get in touch with him.
Bar-El did not respond to The Times of Israel’s request for comment. In the past, he has denied any ownership or decision-making responsibilities in the business and has repeatedly claimed that his role was limited to that of an external legal advisor to Nadav Gover and his companies.
But according to prosecutors, Bar-El was in charge of setting up offshore companies, bank accounts and payment processors for the GetFinancial crew, and eventually came to own a 15 percent share in the GetFinancial Group’s holdings.
“Bar-El worked for the gang of accused persons primarily as a legal adviser up to and including early 2017 and he primarily founded companies abroad, absolutely aware of the fact that the gang of accused persons sold the products they offered fraudulently,” prosecutors wrote in the January 2022 extradition request.
CEO for criminals?
Pavel Kotler, who is also fighting extradition, joined the GetFinancial Group in 2017 and quickly rose through the ranks, bringing corporate-style leadership to the alleged crime ring, according to German prosecutors.
“He led the criminal organization like a CEO by inviting the management heads to meetings, issuing directives in the areas of organization, and making the important company decisions together with the other accused persons,” the German extradition request read. “His duties included, for instance, organizing meetings and work processes, assigning tasks within the companies, criticizing employees and monitoring the call center statistics.”
According to his LinkedIn profile, in 2012-2017, Kotler was the chief financial officer of a Tel Aviv call center known as Telemaris Marketing Services.
Telemaris Marketing Services ran the binary options websites Cedar Finance, Brokerage Capital, and Regal Options, according to information The Times of Israel obtained from former employees.
On paper, the owner of Telemaris Marketing Services was a Ukrainian citizen named Petro Melnychuk.
Melynchuk’s name appears in the 2021 Pandora papers, a leak of more than 11.9 million financial records from 14 offshore service providers that revealed the ownership information of tens of thousands of offshore companies.
According to the documents, obtained by the International Consortium of Investigative Journalists and shared with other reporters, Melnychuk founded two British Virgin Island companies, Realzone Trading Limited and Supertool Investments Limited, which are connected to a separate criminal proceeding carried out by the US Department of Justice.
Trading relationships
The GetFinancial group also had relationships with two Israel-owned companies that provided trading and customer relationship software for its websites.
These platform providers designed websites, provided clients with a content management system and client relations software, and instructed them on how to set up a call center and speak to clients. The clients then put their own brand names on websites and shared part of their monthly revenues with the company.
One of the platform providers that worked with the GetFinancial group was SpotOption. SpotOption was sued by the US Securities and Exchange Commission in April 2021 for allegedly defrauding thousands of US investors, including retirees, out of at least $100 million. SpotOption failed to defend itself against the suit and the SEC was granted a default judgment in January 2023, which SpotOption has since appealed.
German prosecutors said in their extradition requests that they had received information about links between SpotOption and the GetFinancial Group from the FBI.
“The Prosecutor General’s Office of Bamberg is in possession of comprehensive data that was seized in the proceedings of the Federal Bureau of Investigation against the operators of the Israeli company SpotOption,” the request said.
According to German extradition documents, the GetFinancial Group later went on to use the services of Tradologic, a platform provider which is alleged to have facilitated fraud and money laundering to the tune of hundreds of millions of euros.
