Wednesday, July 22, 2009

Boiler Room Israeli Style, Eleven Arrested in Israel on U.S. Charges for Phony “Lottery Prize” Scheme that Targeted Elderly Victims in U.S.

Boiler Room Israeli Style, Eleven Arrested in Israel on U.S. Charges for Phony “Lottery Prize” Scheme that Targeted Elderly Victims in U.S.

In a scene right out of the Movie "Boiler Room" Israeli con men identified victims, or "leads," by purchasing from list brokers the names and contact information of U.S. residents who subscribed to sweepstakes lotteries. Then, operating out of multiple telemarketing boiler rooms run by "Managers in Israel," "Qualifiers" called the victims and, using a script, falsely told the victims they had won a substantial cash prize, and asked them about their assets. If the victim had sufficient assets, the victim was transferred to a "Shooter," who purported to be an attorney in the U.S., and who told the victims that to obtain the prize, they had to pay several thousands of dollars in fees and taxes.

Lottery names used by the defendants included "Clearinghouse Sweepstakes" and "Consumer's Clearinghouse," and law firm names used included "Abrahams Kline," "Bernstein Schwartz," "Steiner, Van Allen, and Colt," "Bloomberg and Associates," and "Meyer Stevens."

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced that AVI AYACHE, MICHELLE YUVAL, YARON BAR, GILLIAN ROSENBERG, TOSHIN CHARLES SAMUELS, OSHRAT PORTOLYONI, NAOR GREEN, YULIA RAYZ, LIMOR COHEN, IAN KAYE, and AVI PEROV, all residents of Israel, were arrested today by the Israel National Police ("INP") pursuant to a U.S. extradition request on a superseding Indictment filed on July 16, 2009, in Manhattan federal court.

The eleven had been in custody in Israel since July 5 in connection with an Israeli investigation. A twelfth defendant, MATTHEW GETTO, was separately indicted on July 1, 2009, and was arrested by the FBI on July 4, 2009, at Newark International Airport, while attempting to return to Israel.
Same Scam Last Year, Sep. 28, 2008 Nine Israelis arrested for US lottery scam....US federal agents and Israeli police arrested nine Israelis in Tel Aviv and Ramat Gan on Friday on charges that they bilked New Yorkers out of more than $2 million through a lottery telemarketing scam. They are accused of cold-calling people in New York from a "boiler-room" operation in Ramat Gan and asking them to wire as much as $40,000 to Israel to claim nonexistent international sweepstakes prizes. The ring targeted senior citizens, who were told that the calls were coming from a New York law firm and that the wire transfers were taxes and fees that needed to be paid before the winnings could be released, according to an indictment filed in Manhattan federal court.

As set forth in the 2009 Indictments and the Government's victim notification motion in the AYACHE case:
From approximately 2005 through 2009, the defendants participated in a phony "lottery prize" scheme that targeted victims, mostly elderly, in the United States. Aliases and call forwarding telephone numbers were used to mask the fact that the defendants were located in Israel.

Flowers and gift baskets were also sent to some victims to "congratulate" them on their purported lottery winnings. Moreover, victims who sent money to pay the supposed fees and taxes to claim their prize were typically contacted again by Shooters and induced to send additional funds, amounting to tens and sometimes hundreds of thousands of dollars. In reality, there was no lottery prize and the victims were ultimately bilked out of an estimated total of approximately $25 million.

Each of the twelve defendants is charged with one count of conspiracy to commit wire fraud and mail fraud through telemarketing, which carries a maximum potential penalty of 30 years in prison. AYACHE, YUVAL, BAR, ROSENBERG, SAMUELS, PORTOLYONI, GREEN, RAIZ, and COHEN each are also charged with one substantive count of mail fraud through telemarketing and one substantive count of wire fraud through telemarketing. Each of the substantive counts carries a maximum potential penalty of 30 years in prison.

The investigation into this lottery telemarketing fraud is being conducted by the FBI in cooperation with the INP. This investigation follows a coordinated FBI and INP investigation last year that resulted in the indictment in September 2008 of ten other Israeli residents for a similar scheme in United States v. Guy Mayo et al., 08 Cr. 907 (LAK).

Extradition of the defendants in that case remains pending. Mr. DASSIN praised the investigative work of the FBI and the Tel Aviv Fraud Division of the Israel National Police. Mr. DASSIN also expressed his gratitude to the Department of International Affairs within the Office of the State Attorney in the Ministry of Justice for the State of Israel, and the Tel Aviv District Attorney's Office for their cooperation in the investigation. Mr. DASSIN also thanked the Department of Justice Office of International Affairs for its assistance in the extradition process.

This case is being prosecuted by the Office's Organized Crime Unit. Assistant United States Attorneys AVI WEITZMAN and STEVE LEE are in charge of the prosecution.

If you believe you were a victim of these crimes, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900, or . For additional information, go to: on the Internet.