After FBI tip-off, 26 Israelis arrested for forex defrauding of U.S. citizens
In a joint covert operation with the FBI, the Israel Police
arrested 26 people overnight Tuesday-Wednesday in Tel Aviv on suspicion of
involvement in alleged massive fraud and money-laundering offenses related to
digital forex trading.
The statement said the alleged cryptocurrency crimes
involved victims abroad and amounted to tens of millions of shekels.
The arrests were part of a coordinated simultaneous
operation by a number of law enforcement agencies around the globe to detain
those suspected of financial crimes, police said without giving further details
on other locations.
Two of the main suspects, men in their 30s, were set to
appear at Tel Aviv Magistrate’s Court on Wednesday for a remand hearing.
The detained individuals were not named in the statement,
nor was the company for which they apparently worked.
According to the statement, the 26 suspects were all
residents of central Israel and the victims of the alleged fraud all live
abroad.
Police said the investigation began with a report from the
United States that a group of Israelis was defrauding dozens of people to the
tune of tens of millions of shekels under the guise of cryptocurrency financial
transactions. The suspects were said to be allegedly marketing ostensible
products and investments, but not providing them, and keeping the victims’
money.
Israeli detectives located the Tel Aviv office from which
the fraud was allegedly committed against US residents, and identified the
network of individuals involved.
In addition to the arrests, officers from the fraud unit seized
computers and digital storage devices to provide evidence for the
investigation.
According to Channel 12 news, most of those arrested have
claimed no knowledge of any alleged fraud. The company was said to have
attracted workers with promises of high salaries for those who were committed
to working hard.
Israel has been a major hub of online investment scams,
which also operate from Cyprus and throughout Eastern Europe.
When the binary options industry was outlawed via Knesset
legislation in October 2017, largely as a result of investigative reporting by
The Times of Israel that began with a March 2016 article entitled “The wolves
of Tel Aviv,” some scammers shifted to schemes involving forex trading or
cryptocurrency speculation.
Israeli law enforcement officials have prosecuted almost no
online investment fraudsters, despite the fact that the industry has employed
thousands of Israelis who have defrauded billions of dollars from victims
worldwide.
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