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CPA alleges fraudulent securities activity in Discount Bank client accounts

The criminal activity took place when the client was bed ridden due to illness

An expert opinion CPA Zvi Itzik gave Tel Aviv Magistrates Court in conjunction with a NIS 467 million lawsuit against the Netanya branch of Israel Discount Bank states plaintiff George Yehezkel's accounts were misused, and criminal securities transactions were made through them without his knowledge.

The bank says the statute of limitations applies to the now obsolete offenses, and denies the charges against its employees.

Two weeks ago another estimate by a banking expert, Nissim Amar, was given to the court, saying the damage caused to the plaintiff was of NIS 500 million to NIS 1 billion.

George Yehezkel, the owner of an eatery at the Netanya intersection, filed the lawsuit. Through his lawyer he claimed in November of 1999 that bank clerks took advantage of a long period in which he was ill and used his accounts to steal money and forge his signature, activity that led to his complete financial collapse.

Yehezkel has had his account in the Smilansky road branch in Netanya since the 1960s. In the early 1990s he asked several matters that seemed odd about his accounts be explained, but he received no answers. He hired the services of finance specialist Nissim Amar, who in his report at the end of three and a half years of investigation along with a six-member team claimed that "it was the gravest case in all his 20 years as an investigator."

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The police investigation in the matter was however closed several years ago for lack of evidence. An appeal to the attorney general against the closing of the case as well as an appeal to the High Court of Justice on the matter were rejected. However, the police at the time did not have the evidence on which the CPA based his opinion.

Itzik, a partner in the Barlev accounting firm that among others specializes in investigation, location and prevention of fraud, was asked to give his opinion on activity done in Yehezkel's accounts in the years 1980 to 1989.

In his report Itzik stressed that his view does not reflect the overall use of Yehezkel's accounts, since he was not given all the bank documents he required. According to Itzik's findings, major sums were drawn from the accounts using forged checks.

The investigator cited instances where specific checks were cashed twice, the second instance always coming several months later and several hundred thousand shekels higher. Handwriting analyst Yitzhak Hajaj examined the checks and found "corrections and changes clearly indicating the signatures on the checks have been forged."

In addition, in several instances, the investigator found handwritten deposit slips indicating cash deposits, for which Yehezkel's accounts were never credited.

It also appeared to Itzik that during the period of Yehezkel's illness, securities trading was conducted in his account and those of his family members without their knowledge. In a number of the securities transactions, bank employees were listed as the account holders for the purposes of the transactions although the account numbers are Yehezkel's.