An Israeli executive at a Swiss bank suspected of widespread fraud

Avi Lugasi, chief executive officer of Swiss bank Hyposuys Private Bank, has been arrested in Geneva on suspicion of involvement in large-scale fraud. Lugasi, who was born in Israel and has lived in Switzerland for decades, is suspected of stealing the accounts of bank customers.

According to Swiss media reports, the amount of theft is 30-40 million Swiss francs (100-140 million shekels), but the information that has reached the Globe indicates that the amount may reach 350 million shekels. The bank manages about seven billion Swiss francs. Lugasi was arrested September 5 after being stopped by the bank, and his detention was extended for three months.

The arrest followed a routine check by the bank itself, in which irregularities in the documents were found. The bank contacted the police to file a complaint, and the banking regulator in Switzerland. The file has been transferred to the Public Prosecution Office in Geneva, and the Bank continues to cooperate with the investigation.

According to the report published on Swiss business website Bilan, Lugasi admitted the facts at a hearing, revealing the accounts affected by his embezzlement. “He fell into the trap of hiding the heavy losses of one of his old clients in 2015, and the scheme was complex and sophisticated enough to circumvent the bank’s internal rules and procedures and defraud its customers,” Lugacy explained. The suspicion is that clients received false documents attesting to deposits that were not actually made.

Lugasi’s attorney is the attorney. Philip Grombach, known in the Geneva Jewish community. Asked by Globes, Grumbach replied, “I have no comment. I can confirm I’m representing him with my colleague David Peyton, but I won’t respond.”

A quarter of Hyposwiss clients are Israeli

About 25% of the bank’s clients are wealthy Israelis, some of whom have been harmed by Lugasi’s actions. Among them are prominent figures in the Israeli business world who have done business in Eastern Europe. Lugasi worked with Israeli agents, and was in direct contact with some of them.

Globes learned that Adv. Benny Baratz of the law firm Pearl Cohen Zedek Latzer Baratz represents the affected Israeli clients of the bank, who intend to file a lawsuit through him against the bank and against Lugassy. Baratz declined Globes’ request for comment on the case.

The case caused an uproar in the Geneva Jewish community, and many Israelis know Lugacy from his charitable work at Keren Hayesod (United Israel Appeal) in Geneva. At the bank and among Lugasi’s acquaintances, people were surprised by the allegations. Those close to him, who have known him for years, describe him as a kind person, very active in Israeli issues.

In 1989, Lugasi became active in the Keren Hayesod Youth Leadership Department, which is part of the Jewish Agency and was created to raise funds for the World Zionist Organization. Four years later, he was elected head of the Young Leadership. Since 2015, he has served as campaign chair for Keren Hayesod in Geneva. Keren Hayesod is a Geneva social circle that holds events in luxurious banquet halls and fundraising events involving prominent figures in business and the arts. Events raise large sums of money. Lugasi was hosting Israeli delegations at fundraising evenings, celebrities included. According to reports, the events were attended by Tzipi, Bar Refaeli, and former Mossad chief Tamir Pardo.

Born in 1962 in Kiryat Gat, Lugasi was fifteen years old when his parents moved to Geneva. His father was a banker, and he was Keren Hayesod’s first envoy to Switzerland. He returned to Israel to enlist in the Israel Defense Forces, and at the end of his military service he returned to Geneva and in the early 2000s he began working at Bank Atlas owned by Maurice Dweck. The bank was acquired by the Swiss holding company Mirelis, and its activity was later merged with that of Hyposwiss. In the process of the merger, Lugassy brought his clients with him. He married Marcella Dweck, the daughter of the late Maurice Dweck, who owned shares in Hyposuys. They have grown up children, and are now divorced.

The bank, whose main branch is located in the center of Geneva, specializes in private banking, and has extensive activity with Israeli clients who have taken out investments. More than 70% of the bank’s shares are owned by the Lowe family, and the bank’s president is Sully Alan Lowe.

In 2016, the bank bought the IDB Swiss Bank business of the Israeli discount bank for $11 million. At the same time, I opened a representative office in Israel, which is managed by Avi Selma and located in Herzliya. In 2019, it bought the Swiss operation Bank Hapoalim, and in 2021 it bought Mizrahi Tefahot Bank for NIS 160 million. Over the years, it has acquired more and more Israeli clients, and last year they represented 25% of its client base.

Avi Lugasi has not been convicted of any crime, and he has the right to be presumed innocent.

Posted by Globes, Israel business news – – on September 21, 2022.

© Copyright Globes Publisher Itonut (1983) Ltd., 2022.

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