‘Israeli Madoff’ convicted over $150 million Ponzi scheme
Under plea deal, Michael Ben-Ari to serve at least 5 years in prison for what is believed to be worst scam in Israel’s history; is due to cooperate ahead of sentencing
A court on Wednesday convicted Michael Ben-Ari for his role in running a $150 million Ponzi scheme believed to be the worst such scam ever carried out in Israel.
Under a plea bargain agreement accepted by the Tel Aviv District Court, Ben-Ari admitted to charges of aggravated charges of fraud and document forgery, as well as money laundering.
He will serve between 5 and 9.5 years in prison, with the specifics of the sentence to be decided by the court in six months.
Ben-Ari, also known as Michael Greenfield, is an American-Israeli accused of defrauding about 1,000 investors in both countries in a 15-year-long scam. Hebrew media has dubbed Ben-Ari “the Israeli Madoff.”
Under the agreement, Ben-Ari is supposed to cooperate with authorities ahead of the sentencing as they try and recover assets and restore funds to the victims. He will remain in custody during this period.
Israel arrested Ben-Ari in April 2021, but he fled the country on someone else’s passport following his release to house arrest after he posted a NIS 2 million ($625,000) bond. He was later caught in Bosnia and extradited back to Israel in December to stand trial.
The Securities Authority said last year that Ben-Ari had ensnared the victims through his investment company EGFE Israel Ltd. and was wanted “on suspicion of violating the Israeli Joint Investment Trust Law, Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, the Penal Law and the Prohibition on Money Laundering Law.”
“This is the largest Ponzi scheme ever carried out in Israel, with almost all the assets smuggled overseas,” lawyer Eitan Erez, who is representing hundreds of victims, told the Ynet news site at the time.
According to Ben-Ari’s profile on the company website, he emigrated to Israel from the US in 1981 and held management positions in Bank Leumi and the Supersol supermarket chain before founding EGFE (Ever Green Fields Enterprises) in 1999.
A Ponzi scheme usually offers investors high returns, but operates using money from new investors to pay older ones.