Eran Mizrahi indicted for fraud, money laundering

Mizrahi is accused of defrauding investors of NIS 45 million and laundering NIS 250m.

By CHEN MA’ANIT / GLOBES
June 25, 2012 23:12
2 minute read.
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Suspect in court judge handcuffs arrest hearing 311. (photo credit: Thinkstock/Imagebank)

 
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The Economics Department of the State Prosecutor’s Office on Monday filed an indictment in the Tel Aviv District Court against investment manager Eran Mizrahi of Savyon, accusing him of defrauding investors of NIS 45 million and laundering NIS 250m. He was indicted on 96 counts, including stealing from clients, aggravated fraud, writing checks with no coverage, aggravated forgery of a document, use of a forged document and transactions in banned property as defined by the Prohibition of Money Laundering Law (5760-2000).

The indictment states that Mizrahi received from the victims, through aggravated fraud, on the basis of false representations and claims that he made to them, NIS 45m. He allegedly forged documents and used them to reassure the victims and to obtain permission to continue to hold their money without them demanding it back. He allegedly stole the money he was authorized to hold, using it for personal purposes in contravention of the purposes for which he was given it. He allegedly used banned property and provided false details to prevent the banks from reporting to the authorities about the real activity in the accounts.

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The indictment states that, between 2007 and May 2012, Mizrahi made false presentations and claims to many persons, with the intent to defraud them and steal large amounts of money. During the period stated in the indictment, Mizrahi owned Eran Mizrahi Financial Investments Ltd.

On October 6, he changed the company’s name to Citadel Investments & Finances Ltd. and presented himself to many people as the owner of a successful investment company that specialized in foreign-currency investments and advising clients in the foreign- currency market through top Swiss banks.

Mizrahi allegedly falsely represented that he created regular high yields for his clients through a conservative investment profile, while falsely promising that their money would be invested in foreign-currency investment instruments at a Swiss bank, including occasional special investment instruments.

In practice, during the period relevant to the indictment, Mizrahi did not invest his clients’ money in foreign currency, as agreed and falsely declared, but pocketed it. He fraudulently won the victims’ trust, presenting himself as an expert in foreigncurrency investments who achieved high yields. To show off his success, he drove luxury cars, lived in a luxury apartment and invited some clients to restaurants, paying for everything with the money he fraudulently obtained from his victims.

The aggravated circumstances of Mizrahi’s acts arise from the large number of victims he defrauded during the period, the fact that some of the victims were relatives or close friends, the large amounts of money he obtained through fraud and which he stole and the use of false documents for the purpose of defrauding the victims, all while exploiting their confidence in him, according to the indictment.



Mizrahi defrauded, among others, 68-year-old pensioner Ita Gelbert, who suffers from Parkinson’s disease, wiping out her NIS 590,000 in savings, the indictment said. In another case, Mizrahi “defrauded his aunt, Sophia Azeri, by using a false representation to persuade her to sell her apartment and transfer NIS 600,000 to him,” it said.

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