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Nine Israelis arrested for US lottery scam

Sep 28, 2008, 6:41 pm

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International

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.

More than 10 victims were given a US toll-free number to call and told not to tell anyone about the prize drawing, prosecutors said. The money was allegedly wired via Western Union to accounts at Bank Leumi, Bank Hapoalim and Union Bank between September 2007 and this month.

American officials said it was the largest number of Israelis ever held on a single extradition request.

"Cooperation between law enforcement and prosecutors' offices here and in Israel has made clear that borders provide no safe haven for such fraudulent schemes," Michael Garcia, the US attorney for the Southern District of New York, said in a statement.

The Tel Aviv Fraud Division of the Israel Police, the Justice Ministry and the Tel Aviv District Attorney's Office all participated in the investigation. The suspects were initially detained by Israeli authorities on September 9 and 11.

If they are sent to the US, each defendant will face two counts of committing wire fraud through telemarketing and one of conspiracy to commit fraud. They could be sentenced up to 30 years in prison if convicted of all charges.

The nine who were arrested are due in Jerusalem District Court on Sunday for hearings on the US extradition request, according to prosecutors in New York.

A 10th suspect, Shai Kadosh, remains at large, officials said.

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