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The state prosecution is seeking a 17-year jail term for Grigori Lerner, convicted of embezzling NIS 62 million and defrauding 2,500 investors.

During sentencing deliberations in Tel Aviv District Court yesterday, the prosecution asked that Lerner be ordered to pay NIS 25 million in compensation to his clients, approximately 40 percent of the sum he embezzled, which is the maximum fine allowed by law. The prosecution also asked that Lerner be fined or given three more years in prison if he did not pay.

Lerner's defense lawyers asked that the court allow them to delay their response until a professional evaluation of their client's mental state is completed, arguing that he suffers from manic depression.

The prosecution responded by saying that Lerner's mental health problems have been known for years, and should not influence his punishment.

Between 2004 and 2006, Lerner took out Russian-language advertisements inviting investments in an oil trading company he claimed to own. He presented himself as an international businessman specializing in the international fuel trade, and promised a risk-free investment with monthly returns of 2 percent, meaning annual returns of 29 percent.

A total of 2,500 people, mostly immigrants from the former Soviet Union, responded to the advertisement and gave Lerner money. However, Lerner sent the money abroad, and the investors lost everything.

During yesterday's court deliberations, prosecutor Nadav Assael said Lerner "put together a cynical plot, genuinely demonic, to exploit the weakness of a group of immigrants who lived on the margins of Israeli society, in order to steal their money."

The prosecutor said Lerner created a well-organized system that "disseminated falsehoods and lies, fantasies and cheating. Hundreds of elderly pensioners, World War Two veterans, Holocaust refugees, terribly handicapped people, the extreme fringes, lay their hopes on the defendant and his clique, who coolly stripped them of their life's savings."

Lerner, who is currently serving a prison term for a different fraud case, is a danger to society, Assael said.

The representative of the plaintiffs, Dr. Michael Berkovich, told the court that Lerner's fraud had much in common with the case of Bernard Madoff in the U.S., saying that "this case, like the one over there, involves a pyramid scheme."