Today (Tuesday) the attorney's office submitted an indictment to the Tel Aviv District Court against Michael (Mike) Ben Ari, the owner and manager of the EGFE investment company.
The offenses for which the indictment was filed are: receiving something fraudulently under aggravated circumstances, falsifying documents with the intention of receiving something under aggravated circumstances and money laundering offenses.
Along with the indictment, a request for detention until the end of the proceedings was also submitted.
At the end of last week, Ben Ari was extradited to Israel after he fled the country in May 2021, using a fake passport and despite having an exit ban against him.
Last June, Ben Ari was arrested at the border crossing in Bosnia and Herzegovina, and in July an extradition request was submitted in his case to the authorities in Bosnia and Herzegovina.
State Attorney General's Office, photo: Oren Ben Hakon
According to the indictment filed by attorney Stav Ginat and Yossi Zadok, Ben Ari raised huge sums of more than NIS 550 million from approximately 960 different investors while making false promises of abnormal returns as a result of low-risk investments, and giving false representations regarding the nature of the investment and their immediate liquidity of investors' money.
The main investment avenue presented to investors by Ben Ari was the American Blue River Fund, which was presented to investors by Ben Ari as a fund that invests in highly rated American municipal bonds.
Despite the fact that the investors were shown that their money would be invested in the Blue River fund, Ben Ari had no connection with the fund, starting in 2008 at the latest, and since then he stopped transferring the clients' money to it.
In light of the above, the recruitment of the investors was done on the basis of false representations presented to them by Ben Ari, including false promises that the investment in the fund is guaranteed, that the investors' funds are held in trust by the company but are always owned by the investors and that the company guarantees the full amount of the investment.
Some of the documents presented to the investors in order to convince them to invest their money in the company - were fake documents.
In practice, contrary to the presentations presented to the investors, Ben Ari handled the investors' money they captured and used it according to his needs and desires.
Ben Ari operated in the "pyramid method" by paying some of the investors the periodic interest or repaying the principal when it was required using the funds of other investors.
Also, Ben Ari transferred the funds raised from the investors to bank accounts under his control and invested them in assets and ventures that exceeded the presentations presented to the investors and even registered some of them under his own name.
Ben Ari used the investors' funds for a long series of personal uses, including the purchase of real estate assets and the granting of private loans to his associates. It should be noted that over the years, funds in the amount of approximately NIS 265 million were returned to the investors.
Tel Aviv District Court, Photo: Gideon Markovich
Ben Ari is also charged with the offense of forging a passport with the intention of obtaining something under aggravating circumstances.
Later, in May 2021, after being interrogated with a warning and even though he knew that a criminal investigation was underway against him, Ben Ari left Israel using a fake passport of his friend Nahum Eisenstadt, impersonating him and violating the restrictive conditions imposed on him by the court (among them a delay in leaving the country and bail bank account in the amount of two million shekels).
It should be noted that Eisenstadt confessed and was convicted a long time ago in this matter.
In the request for detention until the end of the proceedings, which was submitted at the same time, it was stated that: "As stated, the respondent's actions clearly indicate his dangerousness. The respondent blatantly defrauded hundreds of investors over a long period of time, gained their trust, and tempted them to invest hundreds of millions of shekels through him, even though at no point did he have He intended to follow the promised investment destination, and he did with their money as much as he could. When the network of suspicions tightened around him, he got up and fled the country and the threat of judgment, leaving hundreds of investors facing a broken trough."
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