James Cirrone

Following more than two years of investigation, Israeli police told prosecutors that they should charge Moshe Hogeg, a businessman behind a number of crypto startups over the years, for his role in an alleged $290 million crypto scam.&nbsp;



The police claim that Hogeg raised the inordinate sum of money from Israelis and investors across the world with the pretense of funding four separate crypto projects, the Times of Israel <a href="https://www.timesofisrael.com/police-seek-charges-in-fraud-case-against-crypto-businessman-moshe-hogeg/">reported</a> Wednesday. Instead of doing that, Hogeg lined his own pockets during 2017 and 2018, the police say.&nbsp;



Hogeg was involved in a project with blockchain smartphone startup Sirin Labs. While Sirin Labs is still afloat and selling phones, Hogeg was sued by Foxconn for nearly $6 million in 2020 for not paying manufacturing bills.&nbsp;



Police interviewed around 180 people who were involved. Their dozens of searches yielded 900 pieces of evidence, money and property, the Times of Israel reported.&nbsp;



Following their investigation, police have leveled multiple accusations against Hogeg. These include aggravated fraud, unauthorized theft, falsification of corporate documents, forgery, money laundering, and tax violations, among others.



Hogeg’s troubles with Israeli authorities began in 2021 when he was arrested after police suspected his involvement in fraud and sex crimes. Hogeg, who was released into house arrest a month later, denies all the accusations against him.



Hogeg’s most recent involvement in the crypto space appears to be with Tomi, a Web3 company focused on decentralization and free speech. Hogeg identifies himself as a cofounder of Tomi, and in a <a href="https://twitter.com/moshehogeg/status/1683127139812405248">post</a> on X from July, added that he would “remain an advisor and investor.”







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crypto scam

Israeli police say Moshe Hogeg engaged in $290M crypto fraud, recommend charges

Jacquelyn Melinek

<div id="highlights-block_61a4ed328fd4c" class="highlights">
 <ul>
 <li>Moshe Hogeg, an Israeli businessman, chairman of the Blockchain Research Institute at Tel Aviv University and owner of Beitar Jerusalem FC, was reportedly arrested for alleged fraud and assault charges, according to news reports last week</li>
 <li>Celsius CEO Alex Mashinsky said, “there was no reason for us to suspect any criminal or pending matters” at the time of Shalem&#8217;s employment</li>
 </ul>
 
</div>



Celsius Network has suspended its Chief Financial Officer Yaron Shalem due to external fraud and sexual assault allegations, according to a source close to the matter who shared an internal company letter with Blockworks.&nbsp;



Moshe Hogeg, an Israeli businessman, chairman of the Blockchain Research Institute at Tel Aviv University and owner of Beitar Jerusalem FC, was reportedly arrested for alleged fraud and assault charges, according to <a href="https://www.timesofisrael.com/alleged-dirty-dealings-and-sex-offenses-moshe-hogegs-long-history-of-deceit/" target="_blank" rel="noreferrer noopener">news reports</a>.&nbsp;



Hogeg was arrested alongside seven other individuals, who were unnamed at the time, but one of those individuals was Shalem, the source told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We were recently made aware of news regarding Yaron Shalem, an employee of the company and his involvement in an investigation taking place in Israel. While this is related to a matter that took place over four years ago and before he joined Celsius, we took the decision to suspend Yaron effective as of November 18, 2021,” the Celsius letter stated.&nbsp;</blockquote>



The company also <a href="https://twitter.com/CelsiusNetwork/status/1464293813707489288?s=20" target="_blank" rel="noreferrer noopener">tweeted</a> out on November 26 that the employee was immediately suspended and verified that no assets were misplaced or mishandled.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We were recently made aware of a police investigation in Israel involving an employee. While this is in no way related to the employee’s time or work at <a href="https://twitter.com/CelsiusNetwork?ref_src=twsrc%5Etfw">@CelsiusNetwork</a>, the employee was immediately suspended. We have also verified that no assets were misplaced or mishandled.&mdash; Celsius (@CelsiusNetwork) <a href="https://twitter.com/CelsiusNetwork/status/1464293813707489288?ref_src=twsrc%5Etfw">November 26, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Israeli newspaper <a href="https://www.haaretz.com/israel-news/.premium-israel-arrests-soccer-club-owner-suspected-of-sex-offenses-and-cryptocurrency-fraud-1.10396691">Haaretz reported</a> that police said the eight individuals were arrested on suspicion of cryptocurrency fraud “involving hundreds of millions of shekels,” in addition to sexual offenses. “Each (individual) is suspected of pocketing tens of millions of shekels and conspiring to mislead potential investors on a number of projects involving cryptocurrency,” Haaretz added. 



The source did not clarify which company he was with when the alleged crimes occurred, but according to <a href="https://www.linkedin.com/in/yaron-shalem-b072111/?originalSubdomain=il" target="_blank" rel="noreferrer noopener">Shalem’s LinkedIn page</a>, he was the CFO of Singulariteam VC, an Israeli-based venture capital firm, from January 2014 to March 2018. The conduct in question predates Shalem’s tenure at Celsius by about four years.



Hogeg&#8217;s lawyers said that he &#8220;vehemently denies the allegations against him and is cooperating fully with his investigators,” Haaretz reported. Shalem was not available for immediate comment requested by Blockworks at the time of publication.&nbsp;



“We worked with (Shalem) for eight months, but we are going to let the courts decide and dig into it,” Celsius CEO Alex Mashinsky commented to Blockworks.&nbsp;



“Celsius was not involved or part of it, and we conducted a background check and everything else, and it all came clean, so there was no reason for us to suspect any criminal or pending matters as of eight months ago,” Mashinsky said. “We conducted an internal audit review so nothing is missing and there’s nothing abnormal inside of Celsius, but he is suspended,” Mashinsky added.



Separately, Celsius increased its $400 million Series B round from October to $750 million after oversubscribing the raise, Mashinsky <a href="https://cms.blockworks.co/celsius-expands-its-series-b-from-400m-to-oversubscribed-750m/" target="_blank" rel="noreferrer noopener">told Blockworks</a> on Wednesday. The company’s new proceeds will go toward expanding its product offerings, growing into new markets and further bridging centralized finance and DeFi via its recently announced project CelsiusX, the company said in a statement.&nbsp;



Additionally, Celsius will use the funds to further improve the utility of its platform for its supportive community of users, and its commitment to sustainable Bitcoin mining, the company said.



This is a developing story that could change as more details become available. Please check back for updates.