Moshe Hogeg, the Israeli entrepreneur behind several failed crypto projects, was arrested at the offices of his soccer club on Thursday on charges of fraud and sexual assault.
According to a Bloomberg report, he faces accusations of misappropriating hundreds of millions of dollars of investor funds. He allegedly did this under the guise of several cryptocurrency start-ups.
Authorities also detained a further six suspects at Beitar Jerusalem’s building over alleged involvement in shilling failed cryptocurrency projects.
Police carried out raids on homes and workplaces associated with the eight suspects. Anti-corruption officers obtained equipment and other evidence connected to the multi-million dollar crypto con.
Israeli Police say they uncovered evidence of money laundering and tax offenses during an undercover investigation lasting several months.
Hogeg arrested six months after his employees sued
Two of Hogeg’s employees blew the whistle on a portfolio of cryptocurrency scams in a lawsuit filed in May.
Roee Brocial and Eran Okashithey filed a lawsuit alleging that they were encouraged to get family and friends to invest in three projects. Unfortunately for them, these were subsequently rugged.
The complaint also accused their boss of using the headquarters of his crypto enterprises as “executive pleasure apartments.”
The luxury premises allegedly played host to raunchy parties complete with illicit substances.
At the time, Hogeg’s legal representatives called the lawsuit an attempt at extortion.
Indeed, all three of Hogeg’s crypto start-ups have been huge flops and the tokens related to the projects are now virtually worthless.
First up is Sirin Labs, which sold ‘blockchain enabled’ smartphones. The company saw its SRN token plummet 90% from a 2018 high of $3.
Then there’s STX Technologies, also known as Stox. The Ethereum-based prediction market promised big things, however, its STX token lost almost 100% of its value since 2017.
And finally, most crypto exchanges have dropped Leadcoin (LDC). It purportedly allowed businesses to flog their unused leads.
The accused “acted jointly in a systematic manner, while deceiving investors in a number of projects in the field of cryptocurrencies,” police said in a statement.
“Each pocketed millions of shekels while making false presentations to potential investors to invest in seemingly profitable ventures,” (via The Times of Israel).
Authorities are holding all eight individuals involved in the three failed cryptos on remand.
Police are also investigating Hogeg over sexual offenses
Hogeg’s charge sheet extends further than his alleged coconspirators. He is also under investigation relating to sexual offenses.
Police stopped short of releasing further details, however, Times of Israel notes that earlier this month, a 17-year-old model also accused Hogeg of sexual assault.
According to a Channel 13 news report, Hogeg forced himself on the unnamed model who was able to rebuff his advances.
The model claims she told her agent about the assault. However, the agent who had a working relationship with Hogeg failed to file a police report.
In a statement, Hogeg called the allegations a “smear campaign,” accusing the model of a $4.5 million blackmail attempt.
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