Jewish-Canadian businessman Nathan Jacobson, a strategic partner in Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), who had been declared a fugitive by the US, will be extradited by Canada to the US. He was convicted of laundering $46 million in the clearing of illegal online transactions.
Jacobson was close to leaders in Canada's Conservative Party. His aides say that he considered himself as a mediator between Prime Minister Benjamin Netanyahu's office and Canada's Conservative Party. In March 2012, he attended a political event in Ottawa with Netanyahu and Canadian Prime Minister Stephen Harper. In a newspaper interview, he boasted that he introduced Canadian Minister of Immigration Jason Kenney to Netanyahu.
Jacobson founded several Internet clearing networks, and was active in the US, Russia, and Israel. In Costa Rica, he founded Affpower to sell prescription drugs online, against US law. Jacobson also carried out some of his drugs business through another company, RX Payments.
In 2006, US authorities opened a wide-ranging investigation into the illegal online sales of prescription drugs, gambling, and pornography. In July 2007, Jacobson and 18 others were indicted in the US District Court for the Southern District of California in San Diego in a precedent-setting indictment on illegal e-commerce. The defendants were charged with money laundering through the clearing of illegal online transactions.
Jacobson pleaded guilty to laundering $46 million, and agreed to surrender as part of a plea bargain with the prosecution to help US law enforcement authorities in their investigation of illegal e-commerce. A gag order was placed on the plea bargain, Jacobson's name was removed from the indictment, and he was allowed to leave the US until sentencing.
Jacobson was due to be sentenced to four years in prison, but he did not appear before the San Diego court in July 2012, at which point he was declared a fugitive. At the request of the US, Jacobson was arrested in Canada in late October 2012, and a legal battle ensued against his extradition to the US. A few weeks ago, Jacobson's attorney said that he agreed to be extradited to serve his sentence in the US.
The Israeli connection
Around the time of Jacobson's conviction in the US, he launched clearance operations in Israel. He founded Gibraltar-registered Paygea Ltd., which launched extensive activity and offered low fees to businesses. Paygea was also a sponsor of the Maccabi Tel Aviv Football Club. Jacobson also established a close relationship with then-ICC CEO Boaz Chechik.
In October 2008, Jacobson announced on Paygea's website that ICC had awarded it exclusive clearance for online pornography transactions by all credit cards. Paygea said that its annual turnover from thousands of businesses in eight countries and 25 currencies exceeded $1.5 billion.
Following a series of investigative reports by "Globes" on the ICC affair and the illegal clearance of online pornography, gambling, and "food supplements" transactions, ICC was fined €9 million by Visa Inc. and $3.6 million by MasterCard Inc.
The "Globes" investigation also discovered Chechik and Jacobson's business venture in mid-2008 to set up a clearance company in which ICC would be a partner with Jacobson and an associate of Chechik who was active in Croatian real estate. The deal was never reported to, or approved by, the Bank of Israel or ICC's board of directors, and the report stunned the boards of ICC and its parent company, Israel Discount Bank (TASE: DSCT).
Following the "Globes" report, Discount Bank controlling shareholder Edgar Bronfman ousted ICC chairman Shlomo Zohar, Chechik, and other ICC executives. Discount Bank's internal auditor opened an investigation into the affair, and the bank also commissioned a report by Adv. David Hodek. The bank sent the findings to the police.
The police investigation, which recently reached the final stages, is by the Lahav 433 economic crimes unit in Lod.
Jacobson's attorney in Israel, Adv. Benny Katz, said, "Mr. Nathan Jacobson is under arrest, after he appeared before a Toronto court at his own initiative and waived his right to fight against his extradition. At the hearing, Mr. Jacobson promised to appear before the court within a week for the extradition, and did so.
"The circumstances under which my client is cooperating, and the exact details, cannot be disclosed, as their disclosure is liable to affect his trial, and could also put him and the others at unnecessary risk. In my client's favor, he is not afraid of the extradition, or of the handling of his legal affairs in the US, so he took this courageous step, i.e. voluntarily agreeing to his extradition."
Katz added, "My client's main consideration, as always, was to avoid harm to his family and partners by not turning himself in. Few know how much money my client has donated to needy people in Israel in particular and to many organizations which help Israel, out of his genuine love for the country and its people. My client will always consider himself a proud Jew and Israeli, and he will continue to make donations and work for Israel, for which many people owe him. Our firm will do everything possible to conclude this affair and see justice for Mr. Nathan Jacobson."
Published by Globes [online], Israel business news - www.globes-online.com - on July 15, 2013
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