Israeli Lawyer and Partner Ordered to Repay $190,000 in Miami Real Estate Scam

An Israeli court has ordered attorney David Angel and his business partner David Tausovitch to repay $190,000 to a couple of Israeli investors, ruling they committed fraud in a Miami real estate investment scheme. The investors, acting through their son, transferred $220,000 in late 2019 to a U.S. attorney's trust account for 'flip' deals, which involve buying, renovating, and reselling properties for profit.

Angel, who promoted the investment in a YouTube video claiming his company, Flip, had over 33 years of experience and offered annual returns of 10-35%, contradicted himself in court, stating he was never an owner of the companies. The court found discrepancies between promotional materials and the companies' actual operations, including the company's incorporation in New York in 2015, not decades earlier. Angel had promised investors returns of 10% guaranteed or a shared profit, with properties to be registered in the investors' names.

However, the property purchased for $148,300 in Miami in January 2020 was registered in the company's name. Following the COVID-19 pandemic, Angel informed investors that approximately $50,000 remained in trust after renovation costs and would be transferred upon market stabilization. Later, he claimed the property was not being rented for flip deals. Court proceedings revealed that Tausovitch admitted the funds were transferred from the trust account to the companies' accounts and that the property was secretly rented for two to three months, generating $5,400 in income, a fact not disclosed to the investors.

Angel and Tausovitch attempted to use a promissory note for $225,000 as a defense, claiming it superseded the investment agreement. However, the court rejected this, noting the document was not signed by the investors and was a unilateral commitment by the companies. The judge ruled that Angel, who presented himself as the owner and CEO and shared in profits, could not claim professional immunity. The court awarded the investors $190,000 plus interest and linkage, along with 70,000 shekels for emotional distress, citing the unreturned funds, the prolonged period of uncertainty, and the defendants' failure to return the money for years.

The companies were also ordered to pay the $5,400 in rental income separately, as it derived from the investors' funds. Additional sums for legal expenses and attorney fees were also awarded. The court noted that the initial promise to register the property in the investors' names was impossible to fulfill as properties were bought via foreclosure auctions in the company's name, constituting a clear misrepresentation. The defendants have 21 days to pay the awarded sums.