Israelis nabbed in Philippines are tip of iceberg in alleged fraud gone global
As police raid Israeli-operated boiler rooms in Asia and Eastern Europe, local law enforcement has yet to indict a single operative from an industry that has stolen billions
Simona Weinglass is an investigative reporter at The Times of Israel.
At least eight Israelis suspected of a multimillion dollar online scam are still in custody in the Philippines, after being denied bail by the Philippine Justice Department, according to Philippine media reports.
* See update at the foot of this article.
Last week’s raid, in which almost 500 people were arrested in three adjacent offices, made headlines worldwide, including in Israel. But the call center raided by Filipino police is but one of hundreds of Israeli-run boiler rooms operating worldwide in a global plague that, to the mounting dismay and incomprehension of international law enforcement bodies, is being left unchecked by Israeli law enforcement.
The Israelis in the Philippines were arrested along with 474 of their Filipino employees in a dramatic police raid on their call center in the Clark Freeport Zone in Pampanga last Wednesday.
The Filipino suspects have been released, but the Israelis, who allegedly managed the call center targeting victims abroad through online investment scams, remain in custody.
Six of the Israelis in custody have been identified in the Philippine media as Ishay Shaulov, Ohad Elias, Ran Peled, Eliav Lugassi, Idan Hadad Yehuda, and David Freifeld.
At a press conference last Thursday where eight handcuffed male Israeli suspects were presented to reporters, Philippine police specified the names of four suspects, two men and two women.
The Philippine Anti-Cybercrime Group raided the offices of the company known as International Branding Development Marketing Inc., located in three buildings. The company had allegedly been operating for the past two and a half years.
According to Philippine police, IBD Marketing operated as a call center on behalf of an online trading site called FTOCapital.com, whose call center operators tried to persuade investors to invest in bitcoin.
They allegedly used false names and claimed to be based in London.
Many of the suspects, as well as other employees of the Philippine call center who were not arrested in the raid, are former binary options operatives, as revealed by their LinkedIn profiles and other online postings. In particular, several employees of the Philippine company were previously employed in Israel at Delta P.D. Media Ltd. and/or Gal Media Trade Ltd., two closely linked Israeli companies that operated the binary options websites FMTrader.com and Itrader.co.il.
Delta P.D. Media Ltd. and Gal Media Trade Ltd. were two of hundreds of Israeli binary options companies that operated in Israel in recent years, before the entire binary options industry was outlawed by Israel’s Knesset in October 2017. The binary options industry, which was largely fraudulent, is estimated to have stolen billions of dollars a year from victims around the world and to have employed over 10,000 Israelis before it was banned.
As a result of loopholes in the Knesset law, many Israeli binary options operatives changed the financial product they offer to forex or cryptocurrency and continue to operate much as before. In recent years, Israel binary options operatives have opened call centers abroad — including in the Philippines, Panama, Poland, Albania, Bulgaria, Ukraine, Cyprus and Serbia.
While the Philippines call center whose employees were arrested has allegedly been operating for two and a half years, it saw an influx of Israeli employees in 2017-2018. Philippine government documents show that dozens of Israeli nationals applied for permits to work at IBD Marketing Inc.
Among the earliest to do so, according to the documents, were Reut Maruma and her husband David Elfassi, who in the past was a senior executive at Gal Media Trade. Another employee of IBD Marketing Inc. who also worked at Delta P.D. Media in Israel was Adi Sasportas, an information systems manager, the documents show. Several employees of the Philippine call center have described their workplace in their LinkedIn profiles and elsewhere as “DPD Media.”
The Times of Israel spoke to a New Zealand citizen named Des Cox who lost close to $300,000, his entire retirement savings, to a trading website called FMFX in late 2017. FMFX is operated by a Belize-based company called FM Marketing Ltd, which also ran the binary options website FMTrader.
Cox’s wife said she believes FMFX may have been operating from the IBD Marketing Inc call center in the Philippines because most of the brokers he spoke with had Filipino accents and because an alleged victim of FTOCapital who spoke at the Philippine police press conference described a sequence of events that was remarkably similar to what he experienced.
“They used TeamViewer and kept looking at the money in our bank accounts,” said Cox, referring to a computer program that allows one person to take control of another’s computer remotely.
Cox is currently looking for other people who believe they have been defrauded by the individuals behind FMFX in the hope of launching a joint lawsuit in Israel.
In November 2016, Israeli police raided the Israeli offices of Itrader (Gal Media Trade) and arrested its CEO and salespeople in one of the very few police actions against the Israel’s binary options industry to date. On June 4 of this year, a year and a half after the initial raid, the Israel Securities Authority transferred the case file to the State Prosecutor’s Office. The State Prosecutor will review the evidence and decide whether to indict seven suspects: Ido Fishman, the company’s chairman and CEO; Daniel Swartz, sales manager at Gal Media Trade Ltd., which operates itrader.co.il, and the deputy CEO of another company run by Fishman; Naor Noah, head of retention; Jonathan Tourjman, team leader; and Itzhak Babler, Itam Durab and Maor Jerby, three employees who worked as trading “coaches” on charges of offering securities without a license and aggravated fraud. The Times of Israel reached out to Fishman for a response to the allegations, but no reply was received as of this writing.
If Israeli prosecutors decided to indict the seven binary options operatives, it would be a first. In the ten years that the largely fraudulent industry operated, there have been only a handful of arrests and not a single Israeli prosecution for binary options and related investment fraud.
The Times of Israel has learned that foreign governments that have sought help from the Israel Securities Authority and Israeli police in investigating alleged binary options fraud perpetrated against their citizens have consistently encountered a slow and uncooperative response, even after Israel outlawed the binary options industry.
Law enforcement authorities in countries that are trading partners and allies of Israel have received a brushoff, The Times of Israel was told, when they tried to obtain information or help in investigating Israeli binary options and forex operatives.
The Philippine raids were conducted after three Australians and a South African sought Philippine police assistance, saying the company duped them into investing around $2 million.
Philippine police chief Oscar Albayalde told reporters the company was estimated to bring in deposits of approximately $1 million a day.
Police in Poland have over the last year raided several forex and binary options boiler rooms run by Israelis. In Albania, the financial supervisory authority recently requested the help of the state intelligence service, the state police and the anti-money laundering directorate to combat call centers operating investment scams against targets abroad. Albanian government official Erion Brace estimated there were 80 such call centers in the country. Albanian media reports and the Albanian corporate registry reveal that a significant number of these call centers are operated by Israelis and Israeli-Georgians.
* Update: June 14, 2018: Hebrew media reported that all eight Israeli detainees have been released from Philippine jail and are on their way back to Israel. The Times of Israel is looking into the circumstances of their release.
The Associated Press contributed to this report.