A lawsuit filed last week by Advs. Roy Blecher, Guy Zeevi and Moshe Pekarevits from Krispin Rubinstein Blecher & Co. reveals an intriguingly dramatic crime, featuring no less than five Israeli lawyers.
The lawsuit describes a case involving large-scale fraud, sophisticated and systematic embezzlement and theft, in which Advs. Guy Yuval and Uri Arad allegedly took advantage of their client, who was himself trying to escape from the European legal authorities, in a case in which he was suspected of allegedly swindling investors.
According to the client, while he was on the run, his lawyers stole huge sums of money from him, in the form of bitcoin. 2,300 bitcoins worth about €105 million were allegedly stolen. This case involves three other lawyers who worked with Advs. Yuval and Arad and a broker named Miki Hefetz, who was allegedly a partner in the conspiracy.
The plaintiff is Jack Henry Wygodski, a wealthy Israeli and Belgian citizen, who has remained beneath the radar of the Israeli media.
Wygodski entered into an agreement with Hefetz and Advs. Yuval and Arad, according to which he would transfer to them bitcoins that would be converted by them into euros, after which they would transfer to him the funds received from the conversion, after deducting their commission.
The lawsuit states that in light of the trust he had in Hefetz and in Advs. Yuval and Arad, and believing that they would act appropriately and in good faith in line with the agreement between the parties, Wygodski sent them in several transfers roughly 600 Bitcoins, and later transferred a further 1,700 Bitcoins.
The claims says that Hefetz and Advs. Yuval and Arad misled him and presented him with false and deceitful representations, according to which they would convert his Bitcoins and keep the funds received from the conversion in trust, until they would be transferred to him, when requested. In reality, it is claimed that, they treated the plaintiff's Bitcoins and the funds received following their conversion, as their own, allegedly stealing them from the plaintiff.
Following the agreement, the lawyers transferred the Bitcoins to accounts in Cyprus and Singapore with the purported aim of later converting them into euros for Wygodski's benefit. In March 2021, lawyers Advs. Yuval and Arad signed the "Statement of Trustees" before a notary, Adv. Haim Aharon, who was the founder and owner of the Yuval-Aharon law office, in which they stated that they hold in trust the Bitcoins and Wygodski's funds, and that the funds were deposited in the bank account of Sabari-Yuval-Arad at the UBS bank in Switzerland and in an account in Cyprus.
Arrest warrant in Germany
But at a certain point events started to get complicated. About a month later, in April 2021, a businessman named Avi Itzcovich was arrested in Bulgaria, at the request of the German authorities, on the suspicion that Itzkovich, Wygodski, and others were part owners of trading platforms for investments in binary options and virtual currencies, which allegedly defrauded German investors on these platforms.
Wygodski, came under pressure due to the arrest of his business partner and due to the fact that an arrest warrant was also issued against him by the authorities in Germany. According to the lawsuit, "Given the sense of pressure and helplessness the plaintiff felt due to Itzcovich's arrest, he hastily turned to Advs. Yuval and Arad to consult on how he should act." According to the claim Advs. Yuval and Arad flew to Bulgaria and met with the plaintiff several times in May and June 2021 in Sandanski. Adv. Guy Yuval took a bodyguard to these meetings.
According to Wygodski, Advs Yuval and Arad warned and threatened him that if he did not act as advised, he might serve a long sentence in German prisons. Adv. Yuval instructed the plaintiff to sever ties with his friends and family, took his passport and Israeli ID card to destroy them. Advs. Yuval and Arad instructed him to sever all contact with Adv. Moshe Strugano, who had represented him in all his private matters for a decade, claiming that Adv. Strugano would rob him of all his money.
The plot thickens. According to the lawsuit, Advs. Yuval and Arad devised an escape plan for Wygodski, which involved smuggling him into Latin America, where they claim they have extensive connections, and requested that all phone calls between Wygodski and them should be conducted secretly, using disposable mobile phones, in which dedicated software would be installed to thwart spyware that could listen into or record conversations. They also instructed him, according to the claim, to immediately disconnect from his email server and delete all his folders and documents located in the cloud.
Digital wallet in trust
According to the lawsuit, Wygodski would transfer to Hefetz and Advs. Yuval and Arad his digital wallets with the all the Bitcoins in his possession and the wallet’s passwords. Hefetz and Advs. Yuval and Arad justified this by saying that the transfer of his digital wallets to them was required to prevent the Germany authorities from seizing the wallets as evidence.
The broker and lawyers promised that they would faithfully keep his digital wallets and passwords and the Bitcoins inside them, and that they would convert some of the coins into euros. They also promised that after the plaintiff settled in Latin America, under a false identity, provided by the lawyers, Hefetz, Advs. Yuval and Arad would transfer to the plaintiff the Bitcoins held by them in trust and all the funds from the conversion.
Unlike the transfer of the 600 Bitcoins which was well documented, the transfer of 1,700 additional Bitcoins had no documentation. According to the plaintiff, this was because he trusted them and because he was under enormous pressure due to the arrest warrant issued against him in Germany, and he thus acted in accordance with their plan.
Advs. Yuval and Arad used a third party to transfer fake passports to Wygodski, with which he left Bulgaria and entered Greece. Shortly after he traveled from Greece to Portugal with the same fake passport. In Portugal, Wygodski lived in an apartment paid by Advs. Yuval and Arad. Ultimately, Advs. Yuval and Arad wanted to move Wygodski to Latin America.
When Wygodski left Bulgaria and began his escape to Greece and then to Portugal, Advs. Yuval and Arad refused to have direct contact with him, claiming that they were afraid that the legal authorities in Germany would track them down. When Wygodski was in Greece and Portugal, the lawyers occasionally sent an unidentified messenger to him, to provide him with a mobile phone so that he could talk to them. After the conversation, the messenger would take the mobile phone from Wygodski and disappear.
According to the lawsuit, after several months of living underground and in financial distress, because he had no access to his funds, Wygodski asked Advs. Yuval and Arad to transfer him the funds received from converting the Bitcoins to euros, and the Bitcoins that had been entrusted to them.
The lawsuit says, "All the plaintiff's inquiries were ignored. Advs. Yuval and Arad refused his requests and began to avoid the plaintiff's inquiries to them, while threatening him that if he tried to contact them in order to ask for his money and Bitcoins back, they would contact the authorities in Germany and hand over his assets and money to them."
The lawsuit further reveals that after Wygodski suspected that he had fallen victim to fraud, he contacted Adv. Strugano in December 2021, shared with him his concerns about a long prison term in Germany, as Advs. Yuval and Arad had threatened him, and asked to find out the legal status of his business partner Avi Itzcovich.
Adv. Strugano reassured Wygodski, told him that in his opinion the case in Germany was weak and could be concluded with a plea deal. He said that the claim by Advs. Yuval and Arad that he could expect to serve a long prison sentence in Germany was baseless, and that there was no point in continuing his escape, and it would be better if he turned himself in to the authorities in Germany.
After Wygodski agreed to turn himself over to the German authorities, Adv. Strugano assumed representation of Wygodski in extradition proceedings, and together with another German lawyer who was hired, they contacted the prosecutor's office in Germany and turned the plaintiff over to the authorities there in February 2022 .
Today, Wygodski is being held in custody in a correctional facility in Germany, and his German lawyer is negotiating with the prosecuting authorities to form a plea bargain deal, in which most of the charges against the plaintiff would be dropped, and the investors would be financially compensated.
"False and ugly smear campaign"
The drama does not end there. According to the lawsuit, due to Adv. Strugano's desire to thwart Adv. Yuval and Arad’s allegedly criminal plan to get their hands on Wygodski's money, they went out of their way to discredit Adv. Strugano in the eyes of Wygodski. "After the plaintiff severed his ties with Advs. Yuval and Arad, they devised a malicious plan to harm Adv. Strugano as well and began a false and ugly slander campaign against him, during which they published fictitious articles in which Adv. Strugano was accused of allegedly helping the plaintiff escape from the authorities and who was an accomplice of the plaintiff in conducting frauds in forex trading conducted worldwide."
The lawsuit also claims that Advs. Yuval and Arad hired the services of cyber companies, through which they set up websites where false and misleading information about Adv. Strugano was posted, which included his name, picture, and personal details. They also opened fictitious social media network accounts in the name Adv. Strugano.
Wygodski is currently in custody in Germany on suspicion of defrauding investors. He is requesting, through Advs. Blecher and Zeevi, to get back the €100 million that he claims was stolen from him during his attempt to evade the investigation for the fraud in which he himself is suspected.
"Fictional intimidation lawsuit"
"Globes" was unable to obtain a response from the defendants Advs. Guy Yuval and Uri Arad. Their firm said that they were abroad indefinitely, and that there was no way to contact them while they were abroad. However, after a short time, Adv. Guy Yuval called back and asked to give his response to the article, and even agreed to meet in Tel Aviv. When asked how he could meet in Tel Aviv, while his firm said that he was abroad indefinitely, and that there is no way to get in touch with him - Adv Yuval replied: "Probably a misunderstanding, only Uri is abroad."
On the case, Adv. Yuval said, "This is a fictional intimidation lawsuit, filed by Jack Wygodski, a crook and international criminal who swindled thousands of innocent victims out of hundreds of millions of euros.
"Wygodski is currently accused in Germany of running a criminal organization and sophisticated large-scale transcontinental fraud. Wygodzki is in custody until the end of the proceedings, and criminal and civil lawsuits are being brought against him and his partners in crime, most of whom are Israelis around the world.
"He approached us in order to receive financial services and presented himself as an international businessman. After several months it became clear to us that he belongs to a criminal organization, and that his funds are funds that were stolen in a forex scam.
"When we reported, at the request of the Germany authorities, who are working against him, about his huge amount of money kept in a bank account in Singapore, which he tried to hide from the thousands of victims he defrauded, he made out we were his enemies and persecuted us in every possible way, in order to prevent us from cooperating with the authorities.
"For this purpose, Wygodski even sent criminals to our home in the middle of the night, and to our firm during office hours, in order to discourage us from cooperating in the criminal and civil proceedings against him in Germany. These criminals were filmed and photographed and even arrested by the police, after we filed complaints.
"After the intimidation by the criminals failed, Wygodski moved to the next stage, which is an attempt to discredit us or delegitimize us, with a lawsuit that is entirely an act of fraud, which of course will be rejected. We will not be deterred and will continue to cooperate with the authorities in Germany so that he pays for his actions towards the thousands of victims".
Defendant Miki Hefetz said in response: "I haven't received the lawsuit yet. It's all nonsense, it's all made up. Don't believe everything you hear."
All those involved in the aforementioned case have not been convicted of committing the crimes attributed to them and have the right to be presumed innocent.
Published by Globes, Israel business news - en.globes.co.il - on October 7, 2022.
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