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Two leaders of Israeli fraud ring sentenced in Manhattan Federal Court

Global Fraud
Molly Zelvonberg

Court case proceedings filed in Manhattan federal court reports on a lottery prize scheme targeting the elderly out of millions.

According to FBI reports the defendants operated under various fake law firms that operated in the New York City area, some of the names used were, “Abraham Kline, “Bernstein Schwartz,” "Steiner, Van Allen, and Colt,Meyers Stevens,” and even “Bloomberg Associate.”

Aside from that, the defendants used various aliases, call forwarding telephone numbers to hide the fact that the defendants in this case were located in the state of Israel and had bank accounts in countries like Cyprus and Uganda aside from Israel to move large amounts of money.

To add insult to injury the defendants were even sent shipments of flowers and gift baskets to various victims in the United States in order to congratulate them on their fake lottery winnings.

The U.S. Attorney for Southern District of New York announced that AVI Ayache and Yaron Bar, two leaders of an Israeli lottery ring was sentenced to 13 years and 12 years in prison on mail wire fraud charges. In this case all 12 members of the ring who were charged have pleaded guilty, nine of the twelve defendants have sentences waiting scheduled for July and August.

Manhattan U.S. Attorney Preet Bharara said "Avi Ayache and Yaron Bar were leaders of a predatory group that targeted elderly people in the U.S., conning them into believing they were lottery winners. Preying on their victims’ dreams of financial comfort, Ayache and Bar bilked them out of substantial portions of their life savings. Now Avi Ayache and Yaron Bar will spend a substantial portion of their lives in prison.”

According to FBI reports the operation breaks down as so: Between the years 2005 to 2009 the defendants participated in a phony lottery prize scheme that targeted the elderly living mostly in the U.S. The defendants in this case identified there victims or leads as there are called by buying information from brokers that sell names and contact information of U.S. residents who in turn happen to be subscribers to lottery sweepstakes.

Operating out of many telemarketing boiler rooms run by multiple Managers, Qualifiers would call victims using a script that would falsely tell these victims that they won a substantial cash prize and asked them varies questions about their assets. If in this case if the victims had sufficient assets, the victim was then transferred to a "Shooter," who purported to be an attorney in the U.S., and who told victims that to obtain the prize, they had to pay several thousands of dollars in fees and taxes. Victims who compiled were typically contacted again by "Shooters" and induced to send additional funds, amounting to hundreds of thousands of dollars.

In reality, there was no lottery prize and the victims were ultimately scammed out of millions. In addition to prison terms, Judge Preska also ordered Ayache and Bar to forfeit $8.2 million and pay restitution of $8.2 million. All 11 were extradited to the United States. Twelfth defendant, Matthew Getto, was arrested back in July 2009 at Newark International Airport as he attempted to board a flight for Israel.

This case is being prosecuted by the Office's Violent and Organized Crime Unit.