Investors who lost 600 million shekels when Mike Ben-Ari went bankrupt last year were shocked to hear what Lior Dagan had to say at a meeting of Ben-Ari’s victims on June 29. Dagan is the trustee appointed by the Israeli courts to sue Ben-Ari who fled Israel with a forged passport after being arrested by the Israeli police a year ago.
Dagan’s powerpoint presentation revealed that Ben-Ari ran a scam so extensive that it makes the Bernie Madoff Ponzi scheme look like kid stuff. Over a 12-year period, Ben-Ari managed to pull the wool over the eyes of more than 1,000 investors, myself included, and trick us into believing we were getting high-interest returns on real investments. In fact, Ben-Ari was moving our money into fictitious investments as well as accounts in his name in Montenegro, Hungary, South Africa, Caribbean Islands, the US and Israel.
After obtaining Ben-Ari’s computer from the police, Dagan’s 6-lawyer team has poured over more than 500,000 documents and put in 10,000 hours of legal work in order to track down the funds. He has started to get some small amounts back but Ben-Ari has cleverly hidden most of the funds. Dagan has even met with Ben-Ari in person in Serbia in an attempt to negotiate a deal with him.
Absurdly, even though there is a warrant out for Ben-Ari’s arrest, as there is no deportation agreement between Israel and Serbia, Ben-Ari is out of reach from the hand of the law.
Like many of the other investors in Israel and abroad, many of whom are elderly, I lost my life’s savings as a result of Ben-Ari’s crime. We are struggling to get by while Ben-Ari lives in a luxury home in Belgrade.
The lesson we have learned from all of this is deeper than not just to trust a persuasive individual with your funds, it is that Israel has become a Fool’s Paradise for financial crooks.
Ben-Ari’s activities were perpetrated in full sight of the Israeli Securities Authority. As Dagan reported, the ISA began investigating Ben-Ari in 2018 after a complaint was lodged but failed to inform investors or the public of the risk. When the police arrested Ben-Ari the ISA agreed to let him out on home arrest without electronic monitoring.
And next week comes further proof of how apathetic the Israeli court system is to financial crime.
After Ben-Ari admitted that he managed to flee the country by using the passport of a friend of his, Nahum Eisenstadt, the police apprehended Eisenstadt. Now it turns out the prosecuting attorney has reached a plea bargain with Eisenstadt and is willing to give him the ridiculous and outrageous slap-on-the-wrist penalty of six months community service.
On July 6 we are planning a demonstration in front of the Tel Aviv District court where a judge will decide whether or not to accept the plea bargain.
It’s important that people show up and send a strong message to the Israeli authorities. If we are not protected from financial thieves and their collaborators by harsh sentences, the next successful scam is right around the corner.