Greek police arrested an Israeli man at an airport in Thessaloniki last month on charges of defrauding mom-and-pop investors out of over a million euros.
The man, identified by a Greek journalist who attended a pre-trial hearing as Ori Nagar, was arrested on August 24 on a warrant obtained by prosecutors in Bamberg, Germany, who have requested his extradition to there.
Nagar, a 37-year-old resident of Cyprus, allegedly personally caused 1.4 million euros in known losses to victims in Germany and around the world, according to Greek media reports.
He was visiting Greece when he was arrested. Bamberg prosecutors have not commented publicly on the arrest.
According to reports, Nagar was allegedly a leading member of a ring that defrauded victims via phone and email, urging them to invest money in various financial instruments by promising high profits. A Greek police source claimed he was the manager of a call center that operated the KryptoEUClub website.
Employees of KryptoEUClub allegedly appropriated funds deposited by the victims and distributed them through a complex money-laundering network.
Hundreds, if not more, Israelis have moved abroad in recent years to work in call centers selling fraudulent or high-risk financial instruments, such as binary options, forex, CFD and cryptocurrencies.
Nagar’s Tel-Aviv-based lawyer Amit Bahar did not respond to The Times of Israel’s request for comment prior to publication.
Nagar is one of six Israeli alleged boiler room operatives who have been arrested or convicted by Bavarian prosecutors since the start of 2022. German privacy laws render court filings in that country largely inaccessible to the public. As a result, the names of most of these men have not previously been made public.
The other five men are Benjamin Goldblueth, Tal-Jacki Fitelzon, Shalva Elishakov, Tommy Kostyukovsky and Lior Leo Bakshi, a source with knowledge of the cases informed The Times of Israel.
Since 2018, German prosecutors, and particularly those in Bavaria, have been investigating a phenomenon they have dubbed “cybertrading fraud.”
At a May press conference, the Bavarian State Ministry of Justice described cybertrading fraud as a global phenomenon whereby employees of call centers in places like Ukraine, Georgia, Serbia, Bulgaria and Israel induce people abroad to invest in forex, CFDs, cryptocurrencies and other financial instruments. The investments are fake, and most investors end up losing most or all of their money.
German prosecutors told The Times of Israel that there are several criminal rings involved in such frauds and that most of them were previously involved in Israel’s fraudulent binary options industry, which was outlawed by the Knesset in 2017.
Even when the boiler rooms are in Eastern Europe, they said, Israeli companies are often involved in marketing the scams and providing technology and payments processing infrastructure for them. In countries like Ukraine, Georgia, Bulgaria and Israel, they said, the scam is so big that it has become a major industry.
German prosecutors estimate losses of German speakers to cybertrading scams to be in the billions of euros each year. Since April 2020, they have carried out “action days” in countries including Bulgaria, Serbia, Ukraine, Albania and Georgia, during which they collaborate with local police to raid offices, arrest operatives and seize assets.
These “action days” have so far led to over 20 indictments, including of several Israelis.
In May, Israeli-German dual citizen Benjamin Goldblueth, 38, was sentenced to 4 years and 2 months in German prison. Goldblueth was a retention agent at a call center in Sofia, Bulgaria, where he sold fraudulent investments through the websites alphafinancialgroup.com, zurichfinancialgroup.co, genevacapitalgroup.com and promarketsgroup.com, according to prosecutors.
Goldblueth was arrested in July 2021 when his office in Bulgaria was raided by Bulgarian police. German prosecutors said they identified more than 250 victims of this call center who has lost a total of 14 million euros. Goldblueth was found to have been responsible for more than 3.5 million euros of those losses between October 2016 and July 2021.
Prior to living in Bulgaria, Goldblueth lived in Israel, where he was part of Tel Aviv’s lively expat community.
In a separate case, Israeli Tal-Jacki Fitelzon was sentenced in January 2022 to six years and 10 months in German prison.
Fitelzon was the “vice president of sales” for a group of call centers in Bulgaria, Serbia, Bosnia and Herzegovina, and Georgia that operated the allegedly fraudulent online trading sites Safemarkets, OptionStarsGlobal, Cryptopoint and XTraderFX. He was a deputy of so-called “Wolf of Sofia” Gal Barak, who was sentenced to four years in Austrian prison.
Fitelzon was “accused of being responsible for a total loss of around 8.7 million euros caused to 335 people in the period from March 2016 to March 2019, together with his accomplices,” an October 2021 press release announcing his indictment said.
“It can be assumed that there is a considerable number of unreported cases,” the indictment said.
Awaiting a verdict
On September 12, Israeli call center agent Shalva Elishakov went on trial in Munich . He was sentenced to two years and ten months in prison for causing 261,000 euros in losses to victims. He worked for the XTraderFX trading website, which was linked to the “Wolf of Sofia” investigation.
Meanwhile, alleged boiler room bosses Lior Leo Bakshi and Tommy Kostuyovsky are set to go on trial in Nuremberg in October or November. Kostyukovsky is allegedly responsible for 14.7 million euros in losses while Bakshi is allegedly responsible for 8.6 million euros in losses to victims. They operated the same call center where Goldblueth had been employed.
In a 2017 promotion for a business coaching outfit, Kostyukovsky talked about how lucrative his job was, but said that he hated it and wanted to start a new career as a professional skydiver.
“I didn’t know what I wanted. Every morning I would wake up and I got into this repulsive routine of waking up, going to work, drinking a beer and going to sleep. Though I worked in a job where I made a lot of money, it didn’t make me happy,” he said.
Yaniv Segev, an attorney who represents Kostyukovsky as well as unspecified other Israelis held in Germany, did not comment prior to publication.