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Roni Perl, owner of Reality Group, was arrested yesterday on suspicion of swindling over NIS 10 million from 1,200 owners of timeshare vacation homes after promising them hefty profits.

The Tel Aviv Police fraud unit arrested Ramat Gan resident Perl, 48, yesterday morning. Police detectives believe he was running a Ponzi scheme, using money entrusted to him by his newest clients for interest payments promised to victims who joined earlier.

Perl allegedly set up meetings with people looking to sell off timeshare units they had bought previously and persuaded them to place sums ranging from NIS 50,000 to NIS 200,000, on which he promised double-digit profits for investments that were unconnected to the timeshares.

After obtaining the money, he gave his customers postdated checks for small sums. At first, the checks were honored by the banks, but in the past two months they began bouncing, police allege. Ten alleged victims complained to the police about the fraud.

At his arrest, Perl said he owes millions of shekels on the "gray market" due to the collapse of his business. In a search of his home, police found dozens of rubber stamps for what are believed to be fictitious companies to which Perl transfered his clients' money.

A judge ordered Perl to remain in custody for seven days.

Reality Group's Web site claims the company has more than 3,000 customers and provides business services, including financial solutions, for people with timeshare units and other private individuals and businesses.