Israeli police have arrested eight suspects for allegedly defrauding businesses in France over the Internet.
The eight French-speaking suspects, who worked out of an apartment in the southern city of Ashdod, had allegedly been scamming hundreds of business owners in France by pretending to charge them for “permits” certifying that their businesses were accessible to the disabled, police said Thursday.
The eight suspects were detained late Wednesday and questioned under caution on suspicions of fraud, aggravated fraud, impersonation and money laundering using methods the police described as “social engineering.” Social engineering refers to methods of gaining people’s trust and psychological manipulation to get people to carry out actions or divulge sensitive information.
Among the suspects arrested was Jeremy Zeitoun, an immigrant to Israel from France who in 2014 founded an Israeli-registered company called M.D.R Marketing Development Research Ltd., a self-described “forex company” located in Tel Aviv that advertised widely in Israel for English, Arabic, French, Spanish, German, Italian, and Russian-speaking phone sales agents.
Police searched the apartment where the suspects were arrested and found “advanced technological equipment” that the suspects had allegedly used to carry out their scam against residents of France.
In the past decade, several hundred career Internet fraudsters from France have made Israel their home. Many changed their names upon arrival to obfuscate the fact that they had criminal records in France. They, in turn, employ several thousand new immigrants from French-speaking countries to work in their call centers, which sell everything from fraudulent binary options to forex, diamonds, insurance, cryptocurrencies and many other fraudulent products.
Police have occasionally arrested a handful of alleged scammers but prosecutions are rare and the fraudsters largely operate from Israel with impunity.
One of the largest of these recent scams was binary options, which was carried out not just by fraudsters from France but by native-born Israeli criminals as well operatives from the former Soviet Union and elsewhere. In binary options and forex fraud, victims were lured into investments under false pretenses, and the vast majority lost their money. When the victim protested, the “broker” more often than not disappeared with the money.
Binary options fraud alone was estimated to be earning between $5 billion and $10 billion a year before it was banned by a Knesset law last October that took effect on January 26 of this year. Some binary options operatives have simply ignored the ban, continuing to offer the product from Israel, while others now sell fraudulent forex or cryptocurrency investments, and still others have moved their operations abroad to countries including Russia, Ukraine, Philippines, Panama, Poland, Albania, Bulgaria, Cyprus and Serbia.
On July 17, Israel Police signed an agreement with Europol, the European Union’s law enforcement agency to strengthen cooperation in the joint fight against terrorism and organized crime.