In his five spy thrillers, author and lawyer Haggai Carmon recounts the exploits of Dan Gordon, an ex-Mossad agent who travels the world on behalf of the US Department of Justice recovering assets from white collar criminals. In the first novel, “Triple Identity,” (2005), Dan Gordon tracks an absconded crook to Germany, only to discover that he has three names and three passports and was involved in dirty dealings with Colombians, Germans Iranians and Russians.
Author Carmon denies that he himself ever worked for the Mossad, but acknowledges that Dan Gordon’s spy games are fictionalized accounts of his own experiences traveling to 34 countries as an undercover investigator/litigator for the US Department of Justice, a job he held for 20 years. Carmon is keen to emphasize his close ties to the intelligence community, pointing out that senior brass at Interpol, the Mossad, the CIA and Shin Bet wrote introductions to his spy thrillers.
Now retired from intelligence work, Carmon has drawn on his skills in the last eight months to recover about $2 million on behalf of four separate victims of Israel’s largely fraudulent binary options industry. Asked how he did it, Carmon says he exposed the real identity and location of the binary options companies, many of which hide behind a London address and fictitious names of faux “brokers.”
“I used shock and awe,” Carmon said, describing how he recovered $1.5 million on behalf of California-based businessman Steven Koel. Carmon sent messengers to the homes of senior management and retention staff at binary options website BinaryBook. Each received a personalized letter demanding Koel’s money back.
“They thought that they would be protected by the fact that they used fake names and said they were in England. As soon as I knew their real names and where they live, they were exposed, they lost all their defenses.”
Koel, the California businessman, told The Times of Israel that he was looking for ways to increase his savings to pay for the care of his son, who has serious health issues. He researched online and came across BinaryBook, “which had a very robust and legitimate-looking website,” as well as patient and professional-sounding phone representatives. Koel began trading, winning some trades and losing others, but on the whole seeing his account balance rise. Things went sour earlier this year when he asked BinaryBook to let him withdraw $1 million from his account, and the company hemmed and hawed. Koel felt something was not right.
That’s when he made a connection with Wealth Recovery International, a company that helps binary options victims recover their funds. The Times of Israel has met the owners of Wealth Recovery International but they asked not to be identified by name as it would interfere with the undercover nature of their work. Nevertheless, according to Koel, the company spent hundreds of hours gathering intelligence and strategizing with him over the phone as to how to recover his money. The company put Koel in touch with Haggai Carmon, whose reputation and strongly worded letters clinched the deal. Carmon said there had been no need to go as far as litigation. He simply made it clear that he knew who they were and asked them to show a license to sell securities in Israel.
UPDATE: On March 14, 2019 Austin Smith (aka John Ried), the owner of Wealth Recovery, pleaded guilty to fraud.
Carmon said that BinaryBook’s Israeli lawyer wrote him a lengthy letter “calling me a crook, a thief, a scoundrel… and asking where to wire the money.” Koel recovered all $1.5 million of his investment.
Binary options, money launderers and terrorists
Carmon said when he was first exposed to the scope and sophistication of Israel’s binary options fraud this past April, he was disgusted and awestruck in equal parts.
“I have yet to see a person who earned money trading binary options — not on their computer screen, but who actually withdrew their winnings. Some of the companies are rigged.”
At the same time, Carmon says that the binary options industry is “layered” in a manner he has seen only in espionage organizations or among world-class money launderers or terrorist organizations.
“A top professional tailored the layering,” he said, referring to the practice among money launderers to distance money from its criminal origins by hiding it behind layers of financial transactions. Binary options companies, 90 percent of which, Carmon estimates, operate from Israel, similarly hide behind layers of false identities.
“The customer doesn’t know who they’re talking to. They call a virtual number with a UK country code, but may actually be speaking to someone in Cyprus or Romania. Those people transfer your details to a third company who call you back from Israel, using Anglo-Saxon-sounding fictitious aliases, making you believe they are professional brokers. In fact, they are fast-talking individuals off the street who are trained to make you increase your investment. They transfer your money to a fourth company with a bank account in a fifth country.”
Carmon compares pinning down the owners of a fraudulent binary options company to trying to grasp an eel. “It slips out of your hands and it gives you an electric shock.”
But Carmon followed the money. In Steven Koel’s case, Koel made one bank transfer to Česká Spořitelna bank in Poland and another to Bank Zachodni in Poland. Carmon hired a local Polish attorney whose legal opinion was that this was money laundering since the money was being sent back out of the country. Carmon succeeded where other lawyers have not, he believes, because those lawyers tried to sue BinaryBook’s London shell company as opposed to conducting an in-depth investigation.
“They were afraid of me; they knew I could bring the house down,” he said.
Asked why he doesn’t use his investigative abilities to launch a lawsuit that would bring down the entire industry, Carmon avers that his primary task is to do what’s best for his clients, but adds that if someone were interested in hiring him for such a job he could “look at it.”
From Tel Aviv to New York
Carmon was born in Tel Aviv to Yehiel and Ida Carmon. His father was a banker who also wrote books about Eastern philosophy and poetry. Carmon attended school with such future Israeli luminaries as former IDF chief of staff Amnon Lipkin-Shahak, violinist Itzhak Perlman and former attorney general Yehuda Weinstein.
He graduated Tel Aviv University Law School in 1981 cum laude and went into the insurance business. During this period, he became a close adviser to Labor Party leader Shimon Peres. When he left Israel to pursue a Master’s degree in International Law, Government and Politics from St. John’s University in New York, Peres asked him to be the Labor Party’s chief delegate to the US.
Carmon began to receive phone calls from the US Department of Justice, asking him to help with litigation related to Israel. Carmon did so, he said, and began to receive more and more work, until he ended up working full-time as an outside contractor to the Department of Justice, combining investigations with litigation.
He helped the US track down white collar fugitives to Israel. He also traveled the world trying to figure out where fugitives hid their ill-gotten assets. His five spy novels are based on these experiences. The first, “Triple Identity,” tells the story of an Israeli-American-Romanian fugitive, “Raymond Delouise,” against whom the US government had filed a civil lawsuit for the repatriation of $90 million. After a law firm in Geneva was unable to track him down, Carmon was dispatched to Munich where he found “Delouise” in a morgue with a bullet in his head. The rest of the story can be read in “Triple Identity,” which Carmon says is essentially a true story with some details changed. And, yes, Carmon was physically attacked by criminals and subdued them using krav maga, just as Gordon does in his novels.
The US government eventually gave Carmon worldwide responsibility for asset recovery and pre-litigation intelligence and evidence gathering outside the US. Many of the cases were only financial but some turned out to be espionage or terror-related. In these cases, Carmon was part of a task force with members of the CIA, FBI and FDIC.
Today, Carmon heads Carmon & Carmon, an international law firm with offices in Tel Aviv and New York. He divides his time between New York, Israel and various other countries where his business takes him. His law partner is his wife Rakeffet, with whom he has five children.
In the past eight months, while negotiating on behalf of binary options victims, Carmon said he has received threatening phone calls.
“I tell them to go fuck themselves. I have fought terrorists. I am not deterred. Anyone who threatens me has failed to read my resume.”
His advice to anyone who receives threats from binary options bullies?
“Go to the police. Tell anyone who threatens you, ‘this phone call has been recorded. From now on you are my life insurance policy. If I so much as slip on a banana peel you will be held responsible.’”
He said he has no idea why Israeli law enforcement has not cracked down on binary options fraud. “Ask the attorney general. The victims are not Israeli, so maybe it’s not a priority.”
Asked at what stage it would become a priority, Carmon replied, “If the US government were to approach Israel and say look, thousands of Americans have been victimized and this is happening from Israel, I think the Israeli government would listen.”
The Times of Israel has been exposing Israel’s fraudulent binary options industry in a series of articles since March, beginning with “The Wolves of Tel Aviv,” and has estimated that the industry here encompasses over 100 companies, most of which are fraudulent and employ a variety of ruses to steal their clients’ money. These firms lure their victims into making what they are duped into believing will be profitable short-term investments, but in the overwhelming majority of cases the clients wind up losing all or almost all of their money. Thousands of Israelis work in the field, which is estimated to have fleeced billions of dollars from victims all over the world in the past decade.
The Prime Minister’s Office in October condemned the industry’s “unscrupulous practices” and called for it to be outlawed worldwide.
In November, ISA chairman Shmuel Hauser told The Times of Israel that consultations had begun on the framing of legislation to bar all Israel-based binary options operations from targeting anybody, anywhere. (Israeli firms are already banned from targeting Israelis.) The consultations have extended to Attorney General Avichai Mandelblit and to the government, he said.