Hot dogs, hot checks and hot McCartney tickets: US con man turns himself in after Israel jaunt

'Denver's Bernie Madoff' arrested after flying home, leaving trail of aggrieved Israelis in his wake.

zaler (photo credit: )
(photo credit: )
Arnold (Arnie) Zaler, who fled to Jerusalem last March to escape 30 counts of fraud in Colorado, has flown back to the US and turned himself in after having allegedly scammed numerous Israelis during his 11 months here. Zaler, 59, dubbed "the Bernie Madoff of Denver" because he had been charged with a Ponzi scheme and preying on Jewish clients, was arrested at an Atlanta airport on Friday on arrival from Tel Aviv. A former hot dog king, he had lived for almost a year as a fugitive in Jerusalem before returning home voluntarily, apparently after Jerusalemites he had allegedly swindled informed the FBI of his whereabouts, authorities said. One woman who befriended him said he had learned recently that the US was about to ask formally for his extradition. "He knew an extradition order was coming, and he had come here on forged travel documents," she told The Jerusalem Post on Sunday. "But he told so many lies it was hard to know what was true." Although Zaler is suspected of having swindled a number of people here, no complaints were filed with police. "He left a trail of bad checks everywhere he went," said one man. Two sources in Israel told the Rocky Mountain News in recent weeks that they had been scammed by Zaler. The Israel Police said, however, that no complaints had been lodged, and he was not being investigated for criminal charges here. Recent attempts by the Post to talk to Zaler failed. He quickly hung up whenever a reporter called him. Zaler attended synagogue regularly in the Rehavia neighborhood and created a network of mostly Orthodox immigrant friends and acquaintances. According to one source, he had been negotiating a deal with Supersol to import kosher hot dogs to Israel, while another said he had been looking for investors to open a restaurant in Jerusalem. Another source said he had been involved in a "Paul McCartney swindle," using the English-speaking Jerusalem-based Web site Janglo to scalp what were said to be VIP tickets to the singer's concert here last year. "He preyed on our needs and greeds, trying to make money in a scam," said the source, adding that Zaler "apparently took many of us for a ride." Friends and associates called him a charming con-man and constant womanizer. "He was bright and politically very articulate," said one. "He was indeed charming and talked a good rah-rah Israel game. He whined a lot and seemed not to be in the best of health. We also got contradictory details about his family from him, but it was only when some of us decided to Google him that we understood we needed to be careful. There have been numerous on-line warnings about him trying to scam people here. If he succeeded or not, I do not know." "He was a real charmer," said another friend. "He really knew how to talk you through anything. And he tried to hit on every female guest we entertained in our house." Zaler was taken into custody by FBI agents as he got off a plane at the Hartsfield-Jackson International Airport on Friday, FBI Spokeswoman Kathy Wright was quoted as saying. Jeff Dorschner, a spokesman for the US Attorney's office, said his surrender had been coordinated with the FBI and the State Department, and special agents had been waiting for his plane from Tel Aviv. Zaler, who served prison time for an Arizona fraud conviction in the late 1990s, was indicted in Denver in February 2008 on new fraud charges of allegedly faking $1.5 million in orders for his hot dog business. Facing 30 counts of bank and wire fraud, Zaler promised not to leave Denver and was released on an unsecured $25,000 bond. He handed over his passport to the authorities, as required, but then a few days later, in March 2008, used a different passport to fly to Israel. Press reports in Denver have painted a picture of a colorful character who had a checkered career in business after an unsuccessful run for city council in 1979. In 1996, he was arrested in Arizona and sentenced to 14 years in prison for over 50 counts of fraud. The court said a computer software company he ran called Softie, Inc., which developed popular games, had actually been a pyramid scheme - similar to the one Madoff was alleged to have used when he turned himself in last year. He was said to have exploited his contacts in the Jewish community to carry out a variety of scams, swindling about 60 people of millions of dollars - including the theft of $100,000 from a disabled woman who had just lost her daughter. According to the Rocky Mountain News, he convinced a judge to delay his fraud trial in 1997 by saying his father had died - when he was still alive. Nevertheless, he was paroled in 2002, when he decided to go into his family's business of kosher hot dogs. He returned to Denver, where he opened a meat market and restaurant - Zaler's Kosher Meats and later Kosher Korners - following in the footsteps of his grandfather, who started Zaler's Kosher Meats in 1913. In 2006, a Denver-based kosher-certifying agency took away his kashrut license, saying Kosher Korners did not meet its standards. Federal prosecutors alleged that Zaler had begun scamming investors, forging purchase orders from the Pepsi Center and Coors Field, where he sold his hot dogs. According to the indictment, he used the orders as credit to secure at least $2.2 million in loans from two investment companies and an individual investor. Before Zaler's surrender, the US government had filed a request for extradition with Israeli authorities. Zaler appeared in court in Atlanta on Friday, but authorities said it could be several weeks before he was returned to Denver for his trial, the Rocky Mountain News reported. He now faces huge fines for bank and wire fraud, and up to 30 years in prison, authorities said. Yaakov Lappin and news agencies contributed to this report.