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Soviet Immigrants Sue Israel in Savings Scam

August 8, 1996

TEL AVIV, Israel (AP) _ Last year, Jerusalem artist Vera Gutkin returned to her native Moscow to help her 82-year-old mother emigrate to Israel. They sold the old woman’s apartment and turned to the Israeli Embassy for help in sending the nest egg to Israel.

Now, Gutkin is one of several hundred former Soviets accusing the Israeli government and its immigration agencies of liability for millions of dollars in savings that disappeared en route to the Holy Land.

``I didn’t trust the Russian banks. My friends told me to use the embassy to transfer the money,″ Gutkin said. She gave $45,000 to Israsov, a company she said operated out of an office in the Israeli Embassy.

Several days later, at Israsov’s Israeli office, ``I was told there would be delays,″ she said. ``Then I started getting all sorts of lies. It became clear we would never get the money.″

So Gutkin, who immigrated to Israel 14 years ago, has taken in her penniless mother and is suing Israsov and the Israeli government.

Israsov is a private company and Israel maintains it has no ties to the company. But Gutkin and hundreds of others say the location of the office implied a relationship.

``It’s clear none of us would have given money to Israsov if it hadn’t operated out of the embassy. I was sure this was the officially sanctioned method,″ Gutkin said. ``I expect the Israeli government to give us the money back.″

Israsov stopped making money transfers earlier this year. The company’s owner, Soviet immigrant Leonid Roitman, a Soviet immigrant to Israel, returned to his native Russia. He left behind, according to estimates by his Israeli attorney Ami Osnat, some $5 million in unpaid debts to immigrants.

Roitman was not available for comment. Osnat said the recent fraud accusations stem from defaults linked to a series of bad investments by Roitman in Russian real estate.

Similar money transfer operations were run by other financial companies out of Israeli-affiliated buildings in Kiev, Ukraine, said Doron Dekerman, whose law firm has sued the Israeli government and various Jewish groups for $1.4 million in losses incurred by 177 Ukrainian Jewish immigrant families.

Israeli media reports this week said 300 immigrants have filed such lawsuits in recent months.

Spokesmen for the Israeli Foreign Ministry had no comment.

But in a statement published in the Yediot Ahronot newspaper, the government rejected any liability, arguing that ``there was no negligence or any intimation that the accused were operating on behalf of the state of Israel as regards transferring funds.″

The Jewish Agency, a quasi-governmental Israeli organization that handles immigration, said in a statement that all its representatives in the former Soviet Union were ordered ``not to ... refer any Jew to financial companies promising transfers.″

Gutkin’s lawyer, Yaacov Hisdai, who represents several immigrant families, maintained that in some cases, Israsov was recommended by Russian Jewish employees of the Israeli government’s secretive ``Nativ″ liaison unit in Russia. He said these officials received payments from Israsov.

Israsov lured depositors by offering them dollar-linked interest rates of up to 20 percent a year if they delayed withdrawing the money in Israel, he said.

Phone calls to Israsov’s Jerusalem office went unanswered.

Osnat noted that some $50 million in immigrants’ savings had been successfully transferred from the former Soviet Union to Israel over the past five years, in which some 600,000 former Soviets have emigrated to Israel.

One of Roitman’s investment funds, ``Tehiya,″ owned five floors of a major Jerusalem office building, which is worth enough to partially compensate the victims, Osnat said.

``I don’t think Roitman is a criminal,″ he said. ``His intentions were excellent. He is a very religious man who believed God would help him keep everyone happy.″