Israel says con men stole millions from global companies

AP News
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Posted: Jun 07, 2016 1:35 PM
Israel says con men stole millions from global companies

RISHON LEZION, Israel (AP) — It was an unlikely scene for what has the trappings of a major scam, an office in a dingy building housing a car repair shop a short drive from the glittering Mediterranean Sea. But from here, eight immigrants from Europe allegedly conspired to dupe major multinational companies out of millions of dollars.

Most of them spoke French, the others Italian. Using their language skills and familiarity with European business practices, they telephoned employees at some of Europe's biggest companies, identified themselves as top executives and tricked workers into transferring large sums of money to bank accounts in their control, police said. Among the companies targeted, according to police and suspects' lawyers: Kia Motors, Hugo Boss and Chanel.

It was a classic "fake CEO" or "fake president" scam, a scheme used by criminals worldwide that has robbed companies of some $1.8 billion in just over two years, according to the FBI. Most of the eight suspects in the latest case are either jailed or under house arrest.

But not the man who boasts of pioneering the scam years ago, inspiring copycats like these around the globe: French-Israeli con artist Gilbert Chikli. He mysteriously remains a free man, living in luxury in his villa in a seaside Israeli city as French authorities try to bring him to justice over a massive con for which he was previously convicted.

"If they have a problem, they can come see me. They know my address. I am not fleeing," Chikli told The Associated Press by telephone. "Send them my regards."

The case illustrates how financial crime has globalized faster and more efficiently than the law enforcement that is trying to fight it.

Israel extradited Chikli to France to stand trial in 2008 for defrauding HSBC, Thomson, Accenture and other companies out of 6.1 million euros, and attempting to extract over 70 million euros from at least 33 others. But in 2009, Chikli says he chartered a private plane and flew back to Israel.

A French court in May 2015 sentenced him in absentia to seven years in prison. Instead, he's been hanging out at his private swimming pool.

France issued two requests to Israel for Chikli's arrest, the French Justice Ministry said. The first request came the year after he escaped prosecution in France.

The second came this January, according to a copy of the Interpol notice obtained by The Associated Press. It was issued just two weeks after the release of a new heist-thriller film based on Chikli's life story.

Still, Israeli officials show no signs of going after Chikli, even as they prosecute his alleged copycats for similar crimes. Israel's police and Justice Ministry declined to explain why, saying they do not discuss individual cases. Israeli police said they work with law enforcement from around the world to clamp down on fraud.

France's Justice Ministry said the Interpol notice issued against Chikli is the equivalent of a provisional arrest warrant, with an aim to extradite a criminal to France. But Interpol cannot force a country to comply with arrest notices.

Criminals, in contrast, have been far more nimble at running their cross-border activities, keeping a step ahead of the law.

In the case of the eight immigrants in Israel, police began tracking them in November, secretly videotaping them from inside their office in Netanya, a Mediterranean city north of Tel Aviv that is home to a large French immigrant community.

On May 2, police raided the suspects' office. Police investigated the case together with Belgian authorities, requesting legal assistance from France, Italy, Poland, Czech Republic and Slovakia, according to court documents.

Defense lawyer Liya Felus said indictments in the case are set to be issued Wednesday, though she did not know how many would be charged.

The suspects are suspected of defrauding or attempting to defraud companies in France, Belgium, Italy and elsewhere in Europe out of 10.5 million euros ($12 million). A police investigator said in court that between January and April, they'd managed to persuade an employee of Kia Motors in France to transfer 462,000 euros ($520,000) to a bank account they controlled.

A lawyer for one of the suspects said police confronted his client with documents pertaining to luxury fashion companies Hugo Boss and Chanel. Police would not comment on the companies involved.

Chanel declined comment. Repeated messages to Hugo Boss went unreturned. A spokesman for Kia Motors France declined to comment on the case, but acknowledged the company is confronted with cybercrime.

One suspect's lawyer said his client has confessed to his role in the scam, while others say their clients are innocent, or invoking the right to silence. One lawyer said his client told him from jail that it was unfair that he, who professes innocence, was in Israeli custody while Chikli, who had confessed to his scam, lived free. The lawyer spoke on condition of anonymity to discuss a private conversation with his client.

Chikli's first victim, the manager of a bank whom he convinced to hand over a cash-stuffed bag in the bathroom of a Paris café in 2005, is shocked that Chikli has escaped his prison sentence, according to her lawyer.

"She is absolutely scandalized," said Sylvie Noachovitch, a lawyer for Madame G., whose name cannot be printed due to French privacy laws. "For France, this seems not to be a priority issue."

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Associated Press writer Tia Goldenberg in Jerusalem and Raphael Satter and Philippe Sotto in Paris contributed to this report. Kinetz reported from Shanghai.