Tel Aviv Court Upholds Cancellation of Pythagoras Credit License Over Role in Slice Fraud Chain
The Tel Aviv District Court rejected an appeal by Pythagoras Credit, owned and run by Aviv Levi, against the decision of Israel’s Capital Market, Insurance and Savings Commissioner, Amit Gal, to revoke its lending license. The case is tied to businessman Amnon Yaacobi and the Slice savings scandal, in which 850 million shekels of savers’ money were funneled from IRA accounts into alternative investments and then disappeared.
Judge Kobi Vardi said the case could not be separated from the Slice affair, which he said showed the risk to the public. He accepted Gal’s view that Pythagoras “closed its eyes” and acted with severe professional negligence by ignoring clear financial warning signs, especially unusually favorable funding terms. According to the ruling, Pythagoras raised more than 17 million shekels in 2023 from Yaacobi-controlled entities to issue loans for up to 10 years at an average interest rate of 3.6%, far below its other lending rates and below the Bank of Israel rate.
The regulator found that 67% of Pythagoras customers, 243 borrowers, came through Slice, and that 95% of those referred by Yaacobi received loans. Many savers joined Slice shortly before receiving loans. Gal said the company functioned as a conduit for money originating with Slice participants, with at least deliberate blindness to the source of funds. Vardi agreed there was a close dependency between the lending activity and Yaacobi as both financier and referrer, and that the company effectively enabled the completion of the fraud cycle.
The court also found that Pythagoras failed to file unusual reports to the anti-money laundering authority, operated without meaningful underwriting, and lacked effective controls. It cited a suspicious circular loan in which the company lent to a Yaacobi-controlled firm and later borrowed from it, which regulators viewed as possibly fictitious. Vardi called the ruling precedent-setting because it is the first time a lending license was revoked for professional negligence and willful blindness rather than suspected criminal conduct. Pythagoras said the ruling was wrong and said it is considering an appeal to the Supreme Court.
