How alleged Israel-based scammers caused a ‘diplomatic incident’ with France
Three Franco-Israelis await trial for allegedly impersonating France’s foreign minister as part of a ‘ransom payments’ sting estimated to have netted $90 million
Simona Weinglass is an investigative reporter at The Times of Israel.
In February and March of this year, while Israelis were immersed in election news, French media was abuzz with reports about a bold scam believed to have originated in Israel.
Since 2015, someone had been impersonating French foreign minister Jean-Yves le Drian, calling African heads of state, ambassadors, clergy and business figures, asking them to help France pay ransom for French citizens abducted by ISIL or other terrorist groups in Syria.
In some cases, the impersonator donned a custom-designed silicone mask of the French minister’s head and spoke to his targets via Skype from an office decorated with the French flag and a portrait of French Prime Minister Emanuel Macron.
While the scam has been taking place for several years, in recent months French and Polish police have apprehended several suspects in the case, and on February 14, the French prime-time investigative television program “Envoyé Spécial” devoted an entire program to the scam, which it claimed had netted close to 80 million Euros (some $90 million).
Two weeks after the program aired, Israeli police arrested four suspects in the coastal city of Netanya.
“This is a case with international diplomatic repercussions,” a representative of Israel’s fraud police told a judge after the arrests. “This is not an ordinary case but one with great international sensitivities that has caused a diplomatic incident between our two countries. This case is being investigated around the clock in both Israel and France.”
In the course of their investigations, Israeli police even took testimony from France’s foreign minister himself. On March 29, a week after the indictment, Jean Yves le Drian commented to French reporters on the case.
“No one can impersonate me,” he said sternly, “If you impersonate me, you will go to jail.” On a lighter note, he added “they even made a mask of my face. If you watch the videos, it’s impressive.”
In an indictment brought against three of the suspects dated March 21, Freddy Jami, 47 of Netanya, David Eliash, 37 of Herzliya and Shmuel Ben Simon, 37 of Netanya, were charged with conspiracy to commit a crime, forgery with the intent of committing fraud, impersonation and obstruction of justice.
Operating as recently as February
According to the indictment, as recently as February 2019, Jami impersonated the director of Jean Yves Le Drian’s office while another accomplice, whose identity is unknown to police, impersonated the minister himself.
On February 25 and 26 of this year, according to Israeli police, Jami allegedly called the director of a French non-profit organization and told him that his help was urgently needed to free French citizens abducted in Syria. Jami allegedly told the French targets of the scam that the ransom had to be paid through a third-party so as not to publicize the fact that the government was paying ransoms.
In a series of conversations, Jami and his accomplice allegedly told the French non-profit officials that they had managed to collect 36 million Euros so far and suggested that they wire an additional 2 to 4 million Euros to a bank account in Hong Kong.
The French non-profit director told them that he needed time to see how much money he could provide and asked for proof of the veracity of their claims, according to the indictment.
The suspects told him that the foreign minister would be happy to meet with him and that they would return the money later. They also sent the non-profit organization a forged memorandum acknowledging the French foreign ministry’s monetary debt to the organization.
The French non-profit director did not ultimately wire the money, because he and his colleagues suspected they were being scammed.
According to police, on February 26, Jami and one of the other suspects allegedly took the cell phone they had used to call France that day, along with several other phones, and tossed them away on a street in Netanya.
‘No substance’ to the accusations
Israel’s Justice Ministry said it could not comment on ongoing cases but David Fhal, Freddy Jami’s defense lawyer, told The Times of Israel that his client had not participated in any fraudulent activity but had merely accompanied a friend, briefly, to the apartment where the scam allegedly took place.
“Entering and leaving an apartment is not against the law,” Fhal said.
Fhal said that when the police arrested his client and the two other suspects, they threw around accusations of money laundering and fraud but that after eight hearings in which defense lawyers questioned police, prosecutors ultimately filed a “thin” indictment for a single count of conspiracy to commit a crime.
“This case started out as a mountain and has turned into a molehill,” he said.
“My client is currently under house arrest, and we are preparing for the trial which is set to begin June 12. We are hopeful the judge will see that there is no substance to the accusations against my client.”
Asked about pressure from the government of France, Fhal replied, “A lot of things said in the media are not accurate. Is this case connected to the one in the media about impersonation of the minister? No one knows. I am sure France is pressuring Israel to find out who did this but I am not sure they are pressuring Israel on this case in particular.”
This is not the first time Freddy Jami was detained by police. Jami was a suspect over a decade ago in the massive police investigation and eventual prosecution of fearsome Netanya crime boss, Asi Abutbul, and other members of his organization. Abutbul is currently serving an 18-year prison term, largely for crimes of extortion. Jami was never prosecuted in that case, in which he played a minor role, but his testimony to police was cited by Israeli prosecutors in their 2009 verdict against the crime organization.
Jami’s name appears 49 times in the 2009 verdict, where he is described as an intermediary who handed over protection money on behalf of a victim of the organization’s extortion.
“Jami was questioned for some kind of involvement, but there was not sufficient evidence that he did anything wrong,” Fhal told The Times of Israel, referring to the 2009 Abutbul trial.
French organized crime makes aliyah
The French foreign minister scam is but one in a long series of Internet scams, going back more than a decade, perpetrated by recent French immigrants to Israel. These scams have involved fake advertising, insurance, carbon credits, solar panels, impersonating the CEO of a company and impersonating the executor of a deceased person’s will, as well as various investment scams that involve encouraging victims to invest in forex markets, binary options, cryptocurrencies, diamonds and even cows.
An Internet search for “scam” and “Israel” in French yields hundreds of articles, many of which are accompanied by anti-Semitic slurs in the comments section. An equivalent search in Hebrew yields a much smaller number of articles.
Despite the damage such fraudulent activities are doing to Israel’s reputation, Israeli law enforcement has made very few arrests and prosecuted even fewer suspects in the decade or more since the phenomenon first arose.
In the community of French immigrants to Israel, some 80,000 of whom have arrived since 1989, there is embarrassment that Israeli authorities are not doing more to apprehend the criminals, according to Serge Dumont, a Belgian-Israeli expert on Israeli organized crime. Neither have police nor other government agencies released statistics as to how many immigrants are estimated to be involved in fraudulent activity or the scale and impact of this activity on the Israeli economy.
Sources close to the French immigrant community have told The Times of Israel that they estimate that a few hundred “big fish” are involved in fraud, and that several thousand more French immigrants, primarily young people, have worked in fraudulent boiler rooms on behalf of the scammers.
The 2009 Abutbul crime organization verdict mentioned above offers insight into the origins of this kind of activity in Israel.
A significant number of the victims of the crime organization’s violent extortions were new immigrants from France involved in the “advertising” business. Some of the perpetrators of the extortion were also from France.
The verdict did not elaborate on the nature of the advertising business although it generally involves selling advertising space in a calendar or on a website to small businesses in France and Belgium. In some cases, this activity is fraudulent.
In a few cases, the 2009 verdict suggested that the French-Israeli victims of the Abutbul crime organization’s extortion were themselves involved in fraudulent activity, albeit white-collar in nature.
Thus one victim of extortion told police that “he works in advertising scams in France, not for huge amounts, and emphasized that he always steals from people who have insurance and is careful not to harm private individuals. He said that if we don’t pass on his details to the police in France, he would be willing to testify…” according to the 2009 verdict.
The verdict described another victim, a computer professional involved in the advertising business, as someone “involved in scams and criminality, who earned his money dishonestly,” adding that “this explains why he was found to be an appropriate target for a crime organization.”
The Carbon Connection
Other victims of extortion of the Abutbul crime organization whose names appeared in the verdict were later charged or convicted in France for Internet-related crimes. For example, Richard Touil, who in the past was involved in the advertising industry, was recently convicted in absentia in France, along with his brothers Fabrice and Mike, for their roles in the carbon-VAT scam, dubbed the “swindle of the century” in France, in which they and dozens of others bought and sold carbon credits rapidly over the Internet without remitting VAT taxes, thereby pocketing tens of millions of Euros.
In his 2013 book, “Fraud and Carbon Markets: The Carbon Connection,” Marius-Cristian Frunza, a scholar who studies financial crime, postulated that since the turn of the century, and specifically since 2008, organized crime in Europe, the former Soviet Union and Israel has undergone a profound transformation.
While the profits from traditional “street type” gangster crimes like extortion, prostitution and drugs, shrank significantly while inviting a lot of attention from media and law enforcement, he wrote, those crime organizations that were able to successfully expand into Internet-based and financial crime experienced a windfall of previously unimaginable wealth.
Frunza views the carbon-VAT fraud, a significant portion of which was carried out from Israel by French immigrants in 2008 and 2009, as a watershed moment in this transformation, similar to the effect that Prohibition had on organized crime in the US in the 1920s.
“If carbon VAT fraud was a post-modern copycat of Prohibition then it would be one with no war for supremacy between different syndicates,” he wrote. “The psychedelic dream where all the criminal groups could work together resulted in a very silent development of the fraud, with no ‘Saint Valentine’ massacre. Actually the number of casualties allegedly linked to the carbon crime is less than a dozen.”
Frunza also offered a possible explanation for why such crime has proven so hard for law enforcement, including Israeli law enforcement, to tackle.
He suggested that Internet-based crime has ushered in a golden age of collaboration among crime groups. Thus French, Israeli, Georgian-Russian, Bulgarian, Polish and Romanian organized crime groups all participated in the carbon-VAT fraud and established connections that would serve them in the future.
In addition, Frunza wrote, whereas in the past organized crime drew members from the lower rungs of society, today it attracts people with high levels of education, possessing top-notch skills who are tempted by the opportunity to earn a much higher income than they could in the legitimate economy.
The danger of these developments, he added, is that the largely silent nature of Internet crime, its large profits, and the fact that so many educated people are involved, could ultimately overwhelm governments’ capacity to stop it.
“The future threat of crime is pictured on a grand scale, overwhelming the ability of the current legal system to stop or control the phenomena,” he wrote. “In the new age of organized crime, all the current threats emphasized by the cases of VAT fraud in carbon markets will mix and inflate spontaneously, as the colors do in a rainbow.”
