A growing criminal scheme targeting the haredi community was exposed Thursday morning, in which yeshiva students and unsuspecting individuals suddenly discover that they have been registered as owners of businesses they never actually operated, leaving them facing enormous debts, lawsuits, and financial seizures.
According to a report aired on Kol Hai Radio, the scheme typically begins with a seemingly innocent request from acquaintances or other individuals offering financial compensation, an increase in yeshiva stipends, or access to government grants in exchange for a "small favor": providing a copy of an identity card and signing documents and a power of attorney.
In reality, those behind the scheme use these personal details to register fictitious companies and businesses with the tax authorities and corporate registries.
Attorney David Friedman, a member of the Haredi Consumer Protection Forum, described to Kol Hai a case in which a 23-year-old married yeshiva student discovered that he had accumulated debts exceeding NIS 1 million because of a business registered in his name without his full knowledge.
According to Friedman, victims typically discover the situation only after debt enforcement proceedings have been initiated against them and their bank accounts have been seized over debts owed to the VAT authorities, tax authorities, and employees who were not paid their wages.
From a legal standpoint, Friedman emphasized that claims of ignorance do not easily absolve individuals of responsibility, since the legal system generally regards signing an official document as assuming full responsibility for the companies and the debts they accumulate.
However, he noted that in cases where serious deception can be proven, legal action can be taken to seek the removal of liability.