A Jerusalem court this week ordered the extradition to the United States of eight Israelis accused of a running a scam that bilked elderly Americans out of millions. Police allege the men, all in their 20s and post-IDF service, called American senior citizens and told them they had won the lottery and would receive the winnings if they sent a small fee for the transfer. The promised winnings did not exist and all of the alleged victims never received any money.
Two Israeli women in their 20s have already been extradited to the US for their involvement in the case - one six months ago and the other two months ago. Both were extradited to and processed through FBI headquarters in New York.
The defendants face a series of federal charges in the United States, including fraud under aggravated circumstances, wire fraud, using false documents, and impersonating law enforcement officials. None of the defendants have a criminal record.
The case came to light after a victim in the United States contacted law enforcement authorities complaining of the scam. The FBI began to investigate the case and when they detected a connection to Israel, they contacted Interpol which asked Israel police to take the case.
In September 2008, the ring was busted, ending a massive international fraud conspiracy that left hundreds of victims and ravaged life savings in its wake.
A police source told The Jerusalem Post Thursday that the cell operated out of a "boiler room" in Tel Aviv and that the scam was run for around a year. Police called the office the "Guy Naio boiler room,"
after the man suspected of being the ringleader.
There was a division of labor in the "boiler room," with some suspects working as managers and others as "salesmen" who would call up the potential victims and try to convince they won a lottery and must send money.
The "Guy Naio boiler room" resembles a similar case that broke this July, when police busted the "Avi Ayash boiler room," run by its Israeli namesake.
In the "Avi Ayash boiler room," all of the salesmen were Americans and the scam is suspected of fleecing American seniors out of around $35 million. All of the suspects in the Avi Ayash case have been in custody since July, awaiting extradition to the United States.
In a method similar to that used by the Guy Maio crew, the police source said in the "Ayash boiler room," "qualifiers" would call the potential victims and say they were lawyers from a law firm in Albany, New York, calling to inform them they had won money in the lottery. They would then ask the victims for personal financial information, and afterward, tell them that they needed to send money ahead of time for the interest and taxes to receive their winnings.
When the victim would agree, the qualifier would have a manager call the victim, telling them to send money with instructions on how to do so. Once the original payment was received by the ring in Israel, they would call the victims back, saying that they had won even more money and would need to send more. Through this method, they were reportedly able to bilk certain victims repeatedly out of greater and greater sums. According to the police source, one victim of the Avi Ayash scam spent $1.2 million trying to receive his fictional prize.
The police source said that the operation was very sophisticated and the "boiler room" worked full time from the early afternoon into the early morning, to accommodate the time difference with the United States.
The source said that the victims' lists were arranged by US time zone so that as the day progressed, they could move west and call people in later time zones. Each qualifier would call around 200 to 300 people a day.
The police source said that in both of the cases, dozens of victims had their lives ruined, losing everything to the scam.
"These people lost their pensions, their homes, their savings, everything." the police source said, citing the example of one elderly victim working as a busboy in a McDonald's in Detroit after losing his savings and home, and one Illinois woman working as a clerk in a church after she lost everything including her house, after she was convinced to take a mortgage against her home to pay to receive her winnings.
The police source said he believes the defendants on their way to the United States will probably try to receive a plea bargain saying "these guys don't want to face an American jury, not once a jury hears what they've done and hears the victims' stories."