Aviv Talmor, the Founder and CEO of algo-trading company UTrade, has been convicted by an Israeli court for defrauding investors of NIS 77 million ($22 million) and several other charges.
As reported by the local media Globes, on Tuesday morning, the District Court in Tel Aviv convicted Talmor of fraud under aggravated circumstances, theft by an authorized person, money laundering and managing an investment portfolio without any license.
The conviction came after a long trial as Talmor was first indicted by Israeli authorities in December 2018. The court will now hear the arguments around the sentencing on November 24.
A Massive Fraud
The action against Talmor and UTrade started in 2015 when several investors complained to the authorities, which was followed by an inspection.
According to the initial indictment, UTrade raised NIS 100 million between 2012 and 2015 from around 600 clients, promising an annual return from 15 to 20 percent. Though clients of the company were primarily Israelies, a previous report revealed that the firm also targeted global clients.
On top of that, the judge noted that the company did not provide any justification behind those high returns and considered them “false representations.” Moreover, he pointed out that the activities of the misdeeds of the company make it clear that its trading activities were in losses.
Initially, the company specified the separation between the customer funds and company proceeds. However, it used customer deposits for operational expenses and even for strategic expansion with an acquisition . It even paid old customers with the funds of new ones, making it a classic Ponzi scheme .
Additionally, the court acknowledged the testimony of 169 UTrade clients who would not have invested if they knew the company would use their funds for operational expenses. At present, the fraudulent company owes investors $12 million.
Aviv Talmor’s sister, Ma’ayan Talmor pled to the charges of conspiracy to commit a crime. She was fined NIS 10,000 with a suspended sentence. Furthermore, the authorities indicted Roy Cuzin, the Chief Analyst of UTrade, but he fled the country, leading to the suspension of the proceedings.
