The Tel Aviv Magistrates Court today extended for five days the remand of Eran Mizrahi (40) , the investment manager from Savyon who is suspected of defrauding dozens of investors. In the course of the remand hearing, the police declared its intention of filing an indictment against Mizrahi on Monday in the Tel Aviv District Court. It emerged from the hearing that the indictment will include counts of aggravated fraud to the tune of NIS 48 million, aggravated forgery, and offenses against the Prevention of Money Laundering Law. If Mizrahi is found guilty, he can expect a long prison sentence.
The suspicion is that Mizrahi, owner of Citadel Finance and Investment Ltd., raised tens of millions of shekels from dozens of different clients in recent years, undertaking to invest the money on the foreign currency market and promising very high returns. "All along, according to the suspicions, Mizrahi made false representations to clients that their investments were yielding substantial profits."
According to the police, Mizrahi lost most of the investors' money, and also allegedly made use of the money for his personal needs, including family trips overseas, purchases of assets and cars a BMW costing hundreds of thousands of shekels for himself and a luxury Mercedes for his father. "To survive and keep the cash turning over and not betray the truth, Mizrahi transferred money from one investor's account to another, in order to meet requests for withdrawals of capital and profits, and thus, as time went by, he made the damage worse," the police claimed, adding that there were additional investors who had been harmed by Mizrahi's actions and who had not yet filed complaints.
At the same time as the criminal proceedings against Mizrahi, there are also civil proceedings against him, in an attempt to lay hands on the allegedly stolen money and return it to his victims. Bankruptcy proceedings are also underway against Mizrahi's wife.
Published by Globes [online], Israel business news - www.globes-online.com - on June 21, 2012
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