The lawsuits filed against Singulariteam investment fund founder and chairperson Moshe Hogeg, owner of the Beitar Jerusalem soccer club, for several investments that he led in the past two years were apparently a mere preliminary. Sources inform "Globes" that a claim of at least $50 million was recently filed against Hogeg; his Kazakh partner and Singulariteam managing partner Kenges Rakishev; and Joseph Chen, a Chinese-American manager in Singulariteam, in a California court.
The complainant in California is Canadian Internet entrepreneur Adam Perzow, who sold the invest.com domain to Hogeg and Rakishev's company in late 2014 for over $5 million. Perzow alleges that Hogeg violated an agreement for a joint venture, in which he was promised that he would be a partner and manager in a company that would use the invest.com domain.
The statement of claim also alleges that Hogeg took part in an organized plot involving at least 16 individuals or companies, including Rakishev and Chen. The claim accuses Hogeg and his partners of defrauding many investors around the world of hundreds of millions of dollars. Perzow alleges that the three respondents violated the Racketeer Influenced and Corrupt Organizations Act (RICO), a US federal law designed for the campaign against organized crime in the US. The statement of claim has six clauses: violation of contract, violation of duty of loyalty, failure to make proper payment, fraud (this clause refers to Hogeg only), violation of the business registration law, and violation of the RICO Act.
Hogeg has been convicted of no offenses to date. All of the respondents in the affair are innocent until proven otherwise, but the new lawsuit is certainly grounds for concern among the respondents, because it is larger and more serious than those filed against Hogeg to date. Sources also told "Globes" that investors disappointed with their investments in startups led by Hogeg would soon institute additional legal proceedings against him.
Hogeg's representatives told "Globes," "The lawsuit in question is a recycled claim that was already dismissed in New York. It is a direct continuation of ugly attempts at extortion under cover of a legal proceeding. The method of filing a lawsuit against Hogeg, which is being applied in a one state after another in a war of attrition, is designed to fraudulently extract money from him, while damaging his reputation and creating media and public pressure. In this case, also, we will not surrender to the serial complainant's tissue of lies. We will persist in the effort until it is proven that this fabricated claim is another unsuccessful attempted robbery."
Negotiations for an out-of-court settlement in the lawsuit concerning the STX IPO
"Globes" recently published reports about two other lawsuits filed against Hogeg at the Tel Aviv District Court by investors in the enterprises he managed. In the more recent of the two, negotiations are taking place towards a possible settlement in which Hogeg and STX will pay $2 million (over NIS 7 million) to Chinese complainant Zhewen Hu, who sued Hoged and the company, alleging "a well-planned sting" in STX's ICO of the stox.com venture. It is unknown whether the settlement, if and when it is signed, will be brought to the court for approval.
Last December, as first reported in "Globes," a legal dispute was revealed between Hogeg and Singulariteam, which he heads, and 17 shareholders in the AOH binary options company, known under the AnyOption name. The group of investors initially alleged that Hogeg had smuggled assets from IDC Holdings, operating through the invest.com website. Eventually, following a mediation procedure, the dispute ended in a settlement, details of which were left undisclosed.
"Embezzlement of tens of millions of shekels"
"Forbes Magazine" named Rakishev as one of the 50 most influential people in Kazakhstan, with wealth in excess of $2 billion. According to the statement of claim, Chen, a director in IDC Holdings, was a consultant in enterprises led by Singulariteam, including stox.com.
The manager of Singulariteam in 2014 was Adi Sheleg, a former shares trader who turned state's witness in the IDB share offering case, in which Nochi Dankner was later convicted of share manipulation. Singulariteam's chairperson in 2014 was former Prime Minister Ehud Olmert, who was convicted of accepting a bribe in the Hazera Genetic case in 2015. Olmert served 18 months in prison in 2016-2017 for this conviction. Singulariteam's current chairperson is Hogeg.
Perzow attributes his lawsuit to his desire to "put an end to the respondents' illegal and immoral plan to steal the complainant's property, so that it could be used by their criminal organization to defraud and cheat consumers in California and elsewhere, while violating the laws of California, the US, and many other legal jurisdictions." The lawsuit therefore asks the court "to order the respondents to pay the complainant at least $50 million in compensation for the damage caused him as a result of their despicable behavior."
The statement of claim alleges, "Out of a desire for enrichment at the expense of the complainant and others, Hogeg and his partners took over the valuable invest.com domain, which was owned by the complainant. They afterwards used the domain and the business, which the complainant help found, to defraud customers and investors of hundreds of millions of dollars."
Published by Globes, Israel business news - en.globes.co.il - on April 11, 2019
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