Gregory Lerner, who served nearly five years in prison for defrauding Russian banks of tens of millions of dollars, was convicted yesterday of fraud, money laundering and forgery. His sting netted him more than $1 million, says the prosecution.

Lerner, 54, of Ashkelon, was found guilty of manipulating two businessmen into investing in imaginary gas ventures, under a plea bargain in the Tel Aviv District Court.

In 2005, Lerner was accused of masquerading as the owner of well-known companies that import gas and oil. He did this by registering companies under these companies' names: Israel Pacific Petroleum and Petrobel.

The prosecution charges Lerner with forging contracts and other documents in the name of his companies. With these methods and the assurances of enormous profits, Lerner received more than $1 million from two investors - Simeon Savelkin and Oscar Katzenelson - for a "gas project." In practice, he did not invest the money but took it for himself.

To hide the source of the money, says the prosecution, Lerner deposited it under other names, which is a breach of the anti-money laundering laws.

Originally Lerner was also charged with hindering the prosecution by destroying documents. But under the plea bargain accepted yesterday, that charge was quashed.

The court will only pass sentence in May, to give Lerner time to fulfill conditions of the plea bargain, including compensation for his victims and depositing an amount with the state. But he is expected to face prison.

In the past Lerner was convicted of fraud and bribery. He admitted to defrauding Russian banks of tens of millions of dollars, and of trying to bribe Israeli politicians to help him set up a Russo-Israeli bank. He was sentenced to six years in prison and an NIS 5 million fine.