Investigation: Alleged Forex scammers arrested in Israel

Financial Fraud Lawyers is a network of lawyers specialising in defending the interests of traders investing in regulated Forex markets. To achieve this, we assist our clients in recovering their losses due to the reprehensible practices of online Forex brokers. Today, in this article, we want to tell you about alleged Forex scammers arrested in Israel.

What happened to the alleged Forex scammers fraudsters?

The court has unsealed the names of alleged forex scammers wanted in Germany.
Germany is seeking to extradite Israeli citizens Pavel Kotler, Yuri Dashevsky, Nimrod Blachman and Chen Malka for multi-million dollar fraud involving binary options and cryptocurrencies.

The names of the four men arrested near Tel Aviv in Israel last month were revealed by a Jerusalem court before they could be extradited to Germany.

According to the Times of Israel, “Pavel Kotler, 47, of Holon; Yuri Dashevsky, 33, of Kfar Saba; Nimrod Blachman, 33, hometown unknown; and Chen Malka, 31, of Tel Aviv, were considered suspects of engaging in binary options, forex fraud and cryptocurrencies targeting German citizens.”

The arrests were made at the request of German prosecutors, who said they planned to seek the extradition of the individuals to Germany for trial.

A Jerusalem Magistrate’s court judge initially approved the request of the four men’s lawyers to keep their names in secret so as not to damage their reputations, but the gag order has now been lifted.


What are the alleged scammers accused of?

The individuals are accused of being part of an organised group that allegedly operated the websites IntegraOption, SolidCFD, TradeSolid, BitCapitalMarkets, GetFinancial, ProCapitalMarkets, NordCapitalMarkets, ProfitsTrade, FXPace, AcceptTrade and GainFinTech between 2015 and 2019.
(Also read: FXPace: the prelude to an illegal scheme?)

According to the prosecutor’s office in Bamberg, Germany, these websites are run by these four men and their associates over the internet and from call centres in Israel and in Tbilisi, Yerevan and Chisinau – the capitals of Georgia, Armenia and Moldova, respectively.

The suspects allegedly persuaded people around the world to invest money in currencies, binary options and other financial instruments. But according to reports, the suspects did not actually invest the client’s money as promised, but rather used the money to run their call centres and platforms, as well as for personal use.

According to German prosecutors, German victims alone have lost millions of euros because of these websites. These sites target people all over the world, which shows that the losses suffered by the so-called victims worldwide are much higher. According to German prosecutors, the 11 websites controlled by the suspects were supported by two platforms: SpotOption and Tradologic.

Since the beginning of October, a series of raids and arrests of suspected foreign exchange and cryptocurrency scammers have taken place in Israel, Ukraine, Cyprus, Georgia, Bulgaria and the Philippines, at the request of German law enforcement authorities and the FBI. Almost all of these operations targeted groups of suspected scammers led by Israeli nationals.


Why did the alleged scammers choose Israel?

Since 2005, Israel has been considered a hub for Internet fraud, with fake online trading and investment sites. Israeli authorities have seemingly ignored this fraud, allowing it to grow into a full-fledged industry that has employed thousands of people and stolen billions of dollars from Internet users around the world.

Initially, these fraudulent websites offered foreign exchange transactions. In 2013, many forex operators began offering trading in a financial instrument known as binary options.

After binary options websites were banned by the Knesset in 2017, as a direct result of the Times of Israel reports, many of these same agents set up websites that offered fake forex, CFD and crypto-currency trading.

Some moved part of their operations abroad.

While the Israeli police have arrested a handful of these agents over the years, almost none have been prosecuted. Similarly, while the Israeli media has reported on individual investment scams, it has often portrayed them as lone-wolf operations, without explaining that they are part of a massive, interconnected industry.

In recent years, law enforcement agencies in the United States, Germany, Austria and, to a lesser extent, Canada, have, unlike their Israeli counterparts, investigated, charged and convicted some of these alleged Israeli fraudsters.


To conclude this article, the alleged fraudsters are likely to be extradited to Germany for trial. If you feel or have evidence that you have lost your investment on a trading platform in a suspicious manner, contact us on our contact form.

If you feel that your broker is liable for your losses, please contact us and we will provide you with a free preliminary analysis of the case.


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