Israeli Regulator Probes 200 Million Shekel Fraud in Ethiopian Gold Mining Scheme

The Israel Securities Authority has launched a public investigation into businessman Chaim Leib Kaplan over allegations of defrauding ultra-Orthodox investors of more than 200 million shekels. Kaplan operated under the brand YMG Gold Mining, promising lucrative returns from a gold mining venture in Ethiopia. Authorities say the scheme was a classic Ponzi fraud, using funds from new investors to pay earlier ones, despite explicit orders to cease fundraising.

Between 2018 and 2026, Kaplan and his partners, through companies "Lekach Investments" and "Dakaria Investments," raised over 200 million shekels from 219 investors, many of whom were ultra-Orthodox men from the Litvish community in Jerusalem's Ramot neighborhood and Modi'in Illit. Some investors even mortgaged their only homes or took loans to participate. The promise was to double investments within four years, but the project was a sham with false progress reports and unauthorized use of funds.

On February 1, 2026, the Securities Authority demanded Kaplan immediately halt fundraising due to the absence of an approved prospectus. However, Kaplan allegedly ignored this directive and continued soliciting investments. Investigators detained Kaplan for questioning and raided company offices. The total amount raised may have reached 250 million shekels.

Beyond the financial crimes, the case reveals a human tragedy as dozens of families face potential financial ruin and loss of housing. The regulator is examining how the funds were raised, the valuation of the venture, and whether new investor money was used to pay previous investors. Earlier warnings about unregulated investments and fundraising without prospectuses were issued in January. The investigation now focuses on whether any investor funds can be recovered or if the Ethiopian gold promise will remain a painful memory.