Israeli citizen sentenced to 3 years in US prison for forex fraud

Israeli citizen sentenced to 3 years in US prison for forex fraud

Fadi Ewiess’s neighbors in the Arab Israeli village of Reineh reportedly knew that he had money and traveled a lot, but didn’t know why

Simona Weinglass is an investigative reporter at The Times of Israel.

A screenshot of the Golden Bridge Forex website on October 3, 2017 (Screenshot)
A screenshot of the Golden Bridge Forex website on October 3, 2017 (Screenshot)

Fadi Ewiess, a 39-year-old from the Arab village of Reineh, near Nazareth, was sentenced to three years in US prison for operating a website called Golden Bridge FX, which he used to solicit money from investors abroad. Instead of using investors’ money to trade in actual forex markets, Ewiess spent some of the money on personal expenses and gambling and used the rest to pay back earlier investors, in what was essentially a Ponzi scheme.

Ewiess pleaded guilty on April 11, 2017, and was sentenced in a Southern District of New York court last Tuesday.

Acting US Attorney Joon H. Kim said in a press release from the US Justice Department: “As he admitted at his plea, Fadi Ewiess lied to prospective investors about his company’s expertise in the foreign exchange markets, sending them forged ‘guarantees’ from New York banks to entice them to invest with him. Ewiess and others raised more than $5 million from victims around the globe, but instead of investing it, he spent much of that money on gambling, personal expenses, and transfers to family members. Today, Fadi Ewiess learned the price of his criminal conduct.”

Ewiess’ co-conspirators, presumably Israeli citizens, were not named or charged by the US Justice Department.

Ewiess, a graduate of Tel Aviv University, lived in the Arab Israeli village of Reineh with his wife and family. Israeli court documents show that he worked from 2003 till 2010 as a phone sales representative selling supplementary health insurance for Israel’s Clalit Health Fund. At around the time he left that job, he was sued by multiple Israeli banks for debts in the tens of thousands of dollars. By 2016, however, according to journalist Yoav Itiel, who writes for Israel’s Posta crime news website, Ewiess’ financial fortunes had changed.

“Everyone in his village knew he had money and that he enjoyed living the good life, they knew that he traveled abroad a lot, but didn’t know exactly what he did there.”

Ewiess had become involved in Israel’s massive fraudulent online trading industry, which is estimated to bring in $5 billion to $10 billion a year. In 2015 and 2016, according to the US Justice Department, Ewiess was soliciting investments from people abroad, particularly in Saudi Arabia. Several of these Saudi victims of fraud complained to the FBI, which led the US agency to launch an investigation.

Ewiess promised his investors “unrealistically high rates of return,” the press release stated, and “in other instances, falsely told investors that their trading was guaranteed against losses by US banks.”

Ewiess and others sent their investors forged documents that appeared to have been issued by US banks, including JP Morgan.

All told, Ewiess and his co-conspirators raised over $5 million from investors. Golden Bridge FX, which used the website among others, operated in English, Italian and Arabic. In February 2016, Golden Bridge FX was the subject of an investor warning by Swiss securities regulator FINMA.

According to the Posta report, Ewiess was apprehended while on a Caribbean cruise with his family. When his cruise ship docked in Florida, FBI agents boarded and arrested him. According to the complaint in the case, FBI agents first learned Ewiess was involved in the fraud when he entered a Florida bank to withdraw money and his face was captured by a security camera.

In addition to the prison sentence, Ewiess was ordered to forfeit a sum of $2,105,619.91 and the contents of five bank accounts to the US government.

Israel’s fraudulent online trading industry has operated for the past 10 years with little to no intervention from Israeli law enforcement. A draft law introduced earlier this year to ban Israel’s entire binary options industry, as well as forex and CFD companies that operated from Israel without a license, was subsequently watered down to apply narrowly to binary options. Critics have charged that even if the binary options ban is passed, fraudulent forex and CFD companies will be able to operate from Israel and target investors abroad with impunity.

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