Investigation: The Israeli foreign exchange companies accused of scamming Gulf investors

Investigation: The Israeli foreign exchange companies accused of scamming Gulf investors
An investigation by The New Arab's Arabic-language service reveals that Israeli foreign exchange companies are using young Palestinian-Israelis to lure Gulf investors and rob them of huge sums of money.
10 min read
Israeli Forex companies have scammed Arab investors out of thousands of dollars. [Getty]
On the professional networking site LinkedIn, an Israeli company called The Marketing Hub (TMH) says it is specialised in marketing and advertising.

But in one of its advertisements on the Hebrew-language job board Drushim, it calls itself a global foreign exchange (Forex) company.

On Facebook, TMH invites fluent Arabic speakers to send them their CVs, promising them a salary higher than anything they've ever dreamed of.

In order to work with the company you need "motivation not experience", TMH tells its prospective employees. The company's headquarters are in the Hashahar Tower in Givatayim near Tel Aviv.

But TMH's job advertisements don't talk about what kind of work the Arabic-speakers it is recruiting will do. Instead one of them says, "We will not tell you about the nature of this work, instead we want to tell you about the nature of the opportunities waiting for you."

An employee of the company, who identified himself only as "Majid" due to concerns about his personal safety, said that the work of TMH's Arabic-speaking employees involved recruiting investors from Arab Gulf countries so that they could exchange money on the company's platforms.

The Forex company employees interviewed by The New Arab's Arabic service said that data on citizens from Gulf nations was a lucrative business

TMH is an Israeli Forex company but it is not widely known. Other Israeli foreign exchange companies are much more prominent. Majid, who is in his twenties, said that some of TMH's employees earn salaries of up to $15,000 a month.

Majid received a Bachelor's Degree in Economics from Birzeit University in the West Bank but could not find any work for some time. While looking for a job on the LinkedIn website, he found an advert from TMH and applied to them in 2018. TMH put Majid through several training courses and these included practice dialogues to test his ability to influence and convince people of ideas, even if these ideas were not logical. 

His ability to speak in a number of different Arabic accents and dialects – including the Gulf dialect - was also tested. He was subjected to a lie-detector test to make sure that he was not working for another company and hadn't come to steal the data of the Gulf investors – referred to as "leads" - who were dealing with TMH. Majid said that these investors were the victims of a scam.

How the data was obtained

Four employees from Israeli Forex companies, including Majid, all of whom requested anonymity, said that the Israeli companies obtained lists of Gulf leads from a specialised department tasked with monitoring several websites, including LinkedIn, Twitter, Forex Internet forums, and groups of Forex followers on several social media sites. Department employees would also attend conferences regarding digital trading in the Arab world and the wider world.

There are also offices dedicated to compiling "leads data" and selling them as lists to Forex companies, and these work in Israeli-controlled territory, as one employee who worked in the village of Kafr Aqab near Jerusalem said.

"Rama", a journalism and political science graduate who worked for the Forex company UFX, said, "In 2018, an Israeli-Arab journalist posted on Facebook that Israeli Channel 2 needed correspondents for its Arabic service." When she turned up for the interview, to her surprise she found that the interviewer, a Channel 2 employee, started to persuade her to work for his Forex data company and she accepted.

"Rama" doesn't remember her victims very well – or at least, she claims not to – but Jawhara Abdel Rahman, a Saudi investor in her thirties from Riyadh, says she lost $130,000 as a result of her dealings with UFX. She remembers how she had a heart attack and almost died after the company cut off all communications with her in 2019.

UFX employees told Abdel Rahman that it was a British company, but Rama told The New Arab's Arabic-language service that its headquarters was in the Rami Levy compound near the village of Jaba', east of Jerusalem.

UFX focuses on investors from the Gulf, particularly citizens and residents of Saudi Arabia and Kuwait, because these two countries have a large pool of investors. Rama told The New Arab's Arabic service that it targets them through sponsored advertisements and this is confirmed by Mohammed Suleiman, an Egyptian living in Kuwait. His details were acquired by the company through a sponsored advertisement on Facebook, and then a person who gave his name as Hani Al-Haj convinced him to invest.

One company, UFX, focuses on investors from the Gulf, particularly citizens and residents of Saudi Arabia and Kuwait, because these two countries have a large pool of investors

But he ended up being robbed of $500. As soon as he transferred this sum of money to UFX several transactions took place and his account with the company was cleared out. Soon afterwards, UFX no longer responded to his emails.

"Maya", a Jerusalem resident in her twenties who worked in a data-gathering office in the nearby town of Al-Ram, told The New Arab's Arabic service about another way Gulf investors' data would be gathered. On its Facebook page, this office claimed to be an academy which taught English over the Internet. Her job was to convince Saudis in particular to enrol in this "academy" and buy "online courses".

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They would be given phony certificates saying that they had passed the courses, apparently certified by several academic bodies, which would be printed in the office after their details had been obtained and sold to Forex companies.

The Forex company employees interviewed by The New Arab's Arabic service said that data on citizens of Gulf nations was a lucrative business in the three cities hosting most Israeli Forex companies – Tel Aviv, Haifa, and Ramat Gan. Companies sell data on "leads" who have been cheated, and who have stopped dealing with the companies that cheated them, to a new company, which cheats these Gulf investors once again. Sometimes one person's data is sold for $10.

Before buying data, some Forex companies place a condition that the data-selling companies contact leads at random. If most of them respond, the Forex companies buy a full list of leads, according to the employees interviewed by The New Arab's Arabic service.

Above all, Israeli Forex companies prize what they call "fresh leads" – people who are investing in Forex companies for the first time and who have never been the victims of scams before. The price for these leads is higher than leads who have been scammed or who have dealt with Forex companies before, and they are dealt with as major investors.

Different levels of scamming people

Leads are contacted on two ways. "Sellers" – new employees of Forex companies, are tasked with communicating with new investors and small-scale investors whose transactions are worth no more than $5,000.

Then there are the "retention" employees, who are much less in number than the sellers and who handle communication with major investors or with investors who the sellers believe may hand over major sums of money. This was confirmed by the scam victims whose dealings with these companies were documented by The New Arab's Arabic-language service.

For example, scam victim Mohammed Suleiman was passed on from Hani El-Haj to Nassib Naser, UFX's Investment Accounts Manager, when he expressed his willingness to invest large sums of money. Jawhara Abdul Rahman was similarly passed on to another "retention" employee from a seller called Isam.

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The technology departments of Forex companies create and manage investors' personal accounts as well as the data associated with accounts and deposits, including exchange rates and transactions. Investors are then lured and encouraged into major deals. Sa'ed Hassouna, an expert on digital security and new media, says that manipulation of publicly displayed data to lure investors is easy for programmers and does not need much technological skill.

How to avoid fake transactions

Ahmed Aweida, the executive director of the Palestine Stock Exchange, says that any financial transaction outside of a legal and regulated framework is a huge risk. He says that safe transactions which protect the rights of investors take place through licenced systems approved by financial institutions in all countries. Unregulated and unlicensed transactions cannot be trusted.

Raising legal cases against Forex companies is difficult because they change their names, addresses, and contact details and have no fixed assets, such as headquarters

Yasser Al-Amour, a Palestinian-Israeli lawyer who lectures at Birzeit University, says that trustworthy companies always announce the location of their headquarters and branches clearly and precisely so that this can be investigated. They also announce the names of their owners and their histories as well as the names of their employees, their positions, and the fields of their work, so that these can be directly contacted.

Al-Amour says that raising legal cases against Forex companies is difficult because they change their names, addresses, and contact details and have no fixed assets, such as headquarters. They declare bankruptcy from time to time, so it is difficult to seize their assets in order to compensate scam victims, particularly because Israeli law only confiscates the assets of bankrupt companies themselves, not the assets of their owners. This makes it easy for the owners of the scamming companies to escape legal and financial accountability.

A double game

Israeli Forex companies play a double game of cheating and persuasion, says Mohammed Ibrahim, a former employee in his twenties who has now left this type of work. On the one hand the companies try to persuade young unemployed Palestinians and Arabs to join them through extraordinarily high salaries, which The New Arab's Arabic language service saw in cryptic LinkedIn advertisements, which give no information about employers and their addresses.

One advertisement read, "If you are fluent in Arabic, you have an opportunity to earn a salary of 12,000-17,000 NIS [$4,000-5,000] by working for our company… a Forex company located in northern Israel."

On the other hand, the recruited employees are exploited in order to scam Arabs from or resident in the Gulf.

Ibrahim adds that employees of Forex companies are ashamed of disclosing the nature of their work and that most of them hide what they do from their families, relatives, and social environment.

In addition, they suffer from stress, which sometimes turns into psychological illness, because of their assumption of fake identities in their work. They only get to return to their real names and personal lives for the few hours when they are not working.

Ibrahim said that one of his friends' psychological condition deteriorated to the point where he needed constant treatment. His family found out that he was working for a Forex company because he would constantly repeat the names of scam victims and imagine that they were out to kill him.

However, Leila Taher, a scam victim in her thirties living in Beirut, says that investors who have been cheated should sign a petition to bring legal charges against employees of the Forex companies. She was robbed of $3,000 and refuses to see the employees as victims. Taher says they need to be dealt with as criminals because they are these companies' most important assets and the scams can't be carried out without them.

She added that the company employees who contacted her were the main reason she agreed to enter the world of digital foreign exchange. Mohammed Suleiman and Jawhara Abdel Rahman both agree.

The employees are afraid that the secrets of the Forex companies they work for will be exposed, telling The New Arab's Arabic service that their lives would be in danger if this happened, because the management of the companies are involved in illegal activities.

This was confirmed by Ariel Marom, who previously worked for a Forex company and in November 2014 sent a letter to the Israeli Knesset's finance and ethics committees saying that these companies are engaging in "economic terrorism worldwide" in cooperation with crime syndicates in Israel.

The New Arab's Arabic service contacted both TMH and UFX several times asking for a response to the allegations against them but did not receive an answer.

This article was originally reported in Arabic by Majd Ali and Mohamed Azzam. Click here for the interactive version.

English translation by Amr Salahi.

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