Former Israel Credit Cards Execs Settle U.S. $4.5 Million Civil Litigation

Providing credit card services to online gambling and other illegal enterprises proves to be an expensive business

In an Israeli case originating back to 2006 – 2009, a group of 16 former executives and board members of Israel Credit Cards (Cal) have agreed to settle the issue in a 16 million shekels (US$4.5 million) agreement that finalises the civil lawsuit filed against them by Discount shareholders for their role in enabling Cal to clear credit card payments to online gambling and other illegal businesses.

Discount claimed that the Cal executives defrauded MasterCard and Visa by fraudulently offering credit card clearance services to illicit businesses, the Haaretz newspaper reports.

The settlement was approved this week by Tel Aviv District Court Judge Magen Altuvia, although a parallel criminal suit is still in progress. Haaretz reports that the then Cal led by then-CEO Boaz Chechik and former vice president Steve Greenspan allegedly defrauded international credit card issuers MasterCard and Visa.

A criminal case against the (Cal) company itself was settled in November 2016 after the State Prosecutor and Cal agreed that the profits from the illicit business amounting to 85 million shekels, would be forfeited in full in exchange for charges being dropped. However, the criminal proceedings against Chechik and Greenspan remain a work in progress.

In the civil settlement just signed, the former executives will pay the agreed 16 million shekels to Discount, less 2 million shekels for the plaintiffs’ attorneys and 260,000 shekels to the plaintiff shareholders.