Two Leaders Of Israeli Fraud Ring Sentenced In Manhattan Federal Court In Connection With “Lottery” Scheme That Targeted Elderly Victims In The United States
Preet Bharara, the United States Attorney for the Southern District of New York, announced that AVI AYACHE and YARON BAR, two leaders of an Israeli lottery fraud ring, were sentenced today by Chief United States District Judge Loretta A. Preska to 13 years and 12 years in prison, respectively, on mail and wire fraud charges. All 12 members of the ring who were charged in this case have pleaded guilty. With this sentence, nine of the twelve defendants have been sentenced. Before today’s sentencing, the sentences have ranged from 40 to 144 months in prison. Three remaining sentencings are scheduled for July and August, 2014.
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 Ayache and Bar will spend a substantial portion of their lives in prison.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case:
From approximately 2005 through 2009, the defendants participated in a phony “lottery prize” scheme that targeted victims, mostly elderly, in the United States. The defendants identified victims, or “leads,” by purchasing from list brokers the names and contact information of U.S. residents who subscribed to sweepstakes lotteries. Then, operating out of telemarketing boiler rooms run by “Managers,” “Qualifiers” called the victims and, using a script, falsely told the victims they had won a substantial cash prize, and asked them about their assets. If the victim had sufficient assets, the victim was transferred to a “Shooter,” who purported to be an attorney in the U.S., and who told the victims that to obtain the prize, they had to pay several thousands of dollars in fees and taxes. Victims who complied were typically contacted again by Shooters and induced to send additional funds, amounting to tens and sometimes hundreds of thousands of dollars. In reality, there was no lottery prize and the victims were ultimately bilked out of an estimated total of more than $8 million.
The defendants operated multiple boiler rooms that used the names of various sham law firms purportedly located in New York, including law firms named “Abrahams Kline,” “Bernstein Schwartz,” “Steiner, Van Allen, and Colt,” “Bloomberg and Associates,” and “Meyer Stevens.” The defendants further used various aliases and call forwarding telephone numbers to mask the fact that the defendants were located in Israel. The defendants also possessed bank accounts in Israel, Cyprus, and Uganda, to which illegal proceeds were wired. In furtherance of the fraudulent scheme, the defendants even sent shipments of flowers and gift baskets to various victims in the United States in order to “congratulate” them on their purported lottery winnings.
In addition to the prison terms, Judge Preska also ordered AYACHE and BAR to forfeit $8.2 million and pay restitution of $8.2 million.
Eleven of the twelve defendants were arrested in Israel in July 2009. All 11 were extradited to the United States. A twelfth defendant, Matthew Getto, was arrested in July 2009 at Newark International Airport as he attempted to board a flight for Israel.
The earlier sentencings of the members of the lottery fraud scheme included the following:
- On June 5, 2012, Avi Perov was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On August 4, 2011, Yulia Rayz was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On December 15, 2011, Naor Green was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On June 7, 2012, Ian Kaye was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On April 18, 2013, Limor Cohen was sentenced by the Honorable Loretta A. Preska to 97 months in prison on wire fraud charges;
- On December 12, 2013, Matthew Getto was sentenced by the Honorable Harold Baer to 144 months in prison on wire fraud charges.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Peter M. Skinner is in charge of the prosecution.