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US orders seizure of American-Israeli's assets in $150m Ponzi scheme

People walk past a currency exchange shop displaying a giant US dollars banknote in downtown Cairo on November 3, 2016. [KHALED DESOUKI/AFP via Getty Images]
People walk past a currency exchange shop displaying a giant US dollars banknote on November 3, 2016 in Cairo, Egypt [KHALED DESOUKI/AFP via Getty Images]

A United States (US) federal bankruptcy court issued an emergency order yesterday approving a lawyer representing Israel to recover lost funds of more than $150 million for investment victims of one of the largest Ponzi schemes operated in the occupation state.

The proceeding is against Michael David Greenfield, also known as Michael Ben-Ari, whose Israeli investment company EGFE Israel Ltd is suspected of being "one of the largest known Ponzi schemes in Israel."

A Ponzi scheme is an illegal, fraudulent investment operation that pays "returns" to investors from their own money, or money paid by later investors, rather than from an actual earned revenue.

On his EGFE site, Greenfield claims to have held management positions in Bank Leumi, Israel's second largest bank, and in Supersol, Israel's second largest supermarket chain.

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According to the US Seiden Law Group, which represents Israeli court-appointed trustee Lior Dagan, Greenfield is accused of scamming hundreds of people in both countries in a 15-year-long scam.

"This is the largest Ponzi scheme ever carried out in Israel, with almost all the assets smuggled overseas," lawyer Eitan Erez, who is representing some 685 victims, told the Ynet News site.

Erez and Dagan have travelled to several other countries in a bid to recoup the money, he said.

Greenfield was arrested in April by the Israel Securities Authority (ISA). However, according to the Times of Israel, he fled the country using a fake passport after a judge released him to house arrest after he posted a two million shekel ($625,000) bail.

The ISA said he was wanted "on suspicion of violating the Israeli Joint Investment Trust Law, Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, the Penal Law and the Prohibition on Money Laundering Law."

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