Alleged Ponzi Scheme Rocks Israeli Diamond Exchange

(IDEX Online News) – A trader at the Israeli diamond center has been barred from entering the diamond complex in Ramat Gan after allegedly operating a Ponzi scheme. On Wednesday, a $1.3 million lawsuit was filled against him, claiming a 'sting' operation.

Nathan "Tony" Ben-David, a member of the Israel Precious Stones and Diamonds Exchange (IPSDE) has recently been accused of operating a Ponzi scheme, allegedly promising to pay diamond traders 1 percent interest every month.

Ben-David disappeared in early April, raising concerns that he left with money allegedly invested by diamond traders.

Traders complained at the Israel Diamond Exchange that Ben-David did not honor checks, leading to a decision to bar him from entering the Exchange complex.

On Wednesday, Elad Levi Diamonds filled a 5 million shekel ($1.3 million) lawsuit against Ben-David and his company, Alpine Diamonds, among others. In the Tel Aviv County Court documents, Elad Levi describes Ben-David's actions as a well-orchestrated sting operation, "involving a series of real acts of swindling, misrepresentations, fraud and deceit."

They claim that Ben-David used the company's name to buy goods in the market, and after accumulating a debt, disappeared.

Ben-David was summoned to arbitration at the IDE on Sunday. Attorney, Amnon Zichroni appeared on his behalf and denied the charges, IDEX Online has learned.

This event joins other incidents earlier this year at the IDE that rocked the local diamond industry. They include the operation of an illegal bank and allegations of tax fraud.

IDE President Yair Sahar told IDEX Online that all members involved in these incidents have been immediately barred from the exchange. "We have a zero tolerance policy," he said.

Not willing to speak directly about Ben-David's case, Sahar did emphasize that the exchange has a very strict rule about timely payments. "A check must be honored by 2 pm of the due date. A failure results in immediate removal from the exchange."

"Whenever suspicion of criminal acts comes up, they are referred to the police. We operate within the boundaries of the law and do not tolerate any illegal activities."