Israeli Businessman Arrested Over Suspected $60 Million Fraud Targeting Ultra-Orthodox Investors

Chaim Leib Kaplan, an Israeli businessman, was arrested and is under investigation for allegedly raising over 200 million shekels (approximately $60 million) from 219 investors, mostly from the ultra-Orthodox community, without proper securities disclosure. The Israel Securities Authority (ISA) has launched a formal criminal investigation into Kaplan’s activities, which reportedly spanned from 2018 to 2026. Kaplan is suspected of multiple serious financial offenses related to a gold mining venture in Ethiopia.

Kaplan raised funds over about eight years for YMG Gold Mining, an Ethiopian gold mining company, through two private companies he controlled: Lekach Investments Ltd. and Dakaria Investments Ltd. As owner and senior manager, he directly managed fundraising and investor relations, providing periodic updates on the mining project’s progress. The ISA alleges Kaplan primarily targeted ultra-Orthodox investors, promising to double their principal investment within four years.

Investigators suspect the operation resembled a pyramid scheme, where much of the new investors’ money was diverted to repay earlier investors and creditors rather than funding the mining activities. The ISA also accuses Kaplan of systematically misleading investors with false representations about the project’s status and misusing deposited funds beyond authorized limits.

On February 1, 2026, the ISA formally ordered Kaplan to immediately cease fundraising due to suspicions of selling securities without a prospectus. Despite this, Kaplan allegedly continued soliciting investments. The investigation is ongoing, and the companies involved are being shut down by enforcement authorities. Kaplan has not been convicted and retains the presumption of innocence as the legal process unfolds.