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Did he cheat you too?" asks one of Eitan Sror's neighbors in Moshav Gilat in the northern Negev, when asked where he lives on the moshav. "About two months ago, when the whole mess began, a truck came and they took everything out of his house. They say he moved to Be'er Sheva," she says.

The "mess" refers to financial losses estimated in the tens of millions of shekels, suffered by dozens of families - most of them evacuees from Gush Katif - who in the past year and a half invested their compensation money with Sror. For the past month, the investors have been trying to get their money back, but after investing hastily, the manner in which they are choosing to operate now is surprising. They have not turned to the police, and are very cautious about speaking to the media about the affair.

"They were promised that if they kept quiet, things would work out and the money would be returned," is the mantra repeated by almost everyone familiar with the story. But in spite of the promises, some of the victims did not remain silent; they turned for help to people active in the gray market in an attempt to pressure Sror to return their money. To date, as far as is known, very few, if any, have succeeded.

In August 2005, the 8,000 residents of Gush Katif were evacuated from their homes. According to data from the SELA (the Hebrew acronym for Aid for Gaza Strip Residents) administration, each of the 1,800 families living in the Gush received an average compensation of NIS 1.5 million to NIS 2 million. Houses, hothouses, factories and the work of years turned into a nice credit balance in the bank. Since many of the evacuees are still awaiting construction permits for building communities and permanent homes, they wanted to invest the liquid assets in the interim so they would yield profits.

Shlomo Wasserteil, who owned a large nursery in Ganei Tal, lives today with his family (like other evacuees from the settlement) in the community of Yad Binyamin in the area of the Nahal Sorek Regional Council. After the disengagement, he says, "all kinds of people came and made promises, hunters who knew that people had money. These are people who were seeing such sums in the bank for the first time, and some fell into the trap, mainly because it's always a honey trap. There were also serious people who came with serious proposals, but of course their proposals were less attractive."

Five percent a month

At Nitzan and Yad Binyamin, locations where the evacuees are living in mobile homes, as well as in the town of Netivot, there were rumors of a very attractive investment in the diamond business. Wasserteil chose to invest his money in building a new nursery, but many of his neighbors wanted to increase their capital by means of the foolhardy investment.

"The story is simple," explains one of those who invested. "There was talk about a certain person who said he had good deals in diamonds. He proposed that people give him money and he would give them a monthly interest payment of 5 percent." The business, it was explained, was acting as a middleman in the diamond trade - the purchase of diamonds at low prices followed by almost immediate sales at far higher prices. "It was done in cycles of three to four months," says the investor. "You gave money and he would issue a receipt plus his personal check for the money plus part of the interest. When the time came to redeem the check, he would exchange it for one that included the full interest. That's how it worked for several cycles."

The successful diamond middleman was Eitan Sror of Moshav Gilat, a 42-year-old former policeman. After resigning from the police force about seven years ago, he worked at several jobs. A few years ago, Sror was registered in the Tax Authority as the owner of a business called G.R.S. Diamond Consultation. If they had checked with the Diamond Exchange, the Israel Diamond Manufacturers' Association and the Ministry of Industry and Trade, the investors would have discovered that Sror and his business are not registered with any of these bodies. Although this does not prove that Sror did not deal in diamonds at all, the information might have caused them to raise questions and served as another point to consider before they gave him their money.

It might have, but not necessarily, because many of the investors turned to their accountants and their investment advisers, who advised them to avoid such an investment. "I heard all about it," says Avi Hertz, the accountant of most of the former residents of Ganei Tal and of many other evacuees. "I warned them, but they didn't listen to me. I know of clients of mine in Ganei Tal who lost out. People told me they had lost out, but they're extremely closed. I can't tell you the sums, but I do know that we're talking about quite a lot of money."

Uzi Refaeli, who advises farmers evacuated from Gush Katif, was also consulted by people who told him about the offer. "People spoke about very high yields and suitcases full of money. Some of the guys asked me about it, and I told the clients I work with not to get into it." But many didn't listen. The temptation, 5 percent interest a month, was too great, and the first investors did in fact receive a nice yield.

Yossi Neuman, a businessman evacuated from Neve Dekalim, is sharply critical of the investors, but tries to explain their motives: "As painful as it is, and despite the fact that the people themselves are to blame, it's impossible to sever it from the situation into which the state placed these people. Think about a person who lives in a 120-square meter house, but received money for a 90-meter house. During this time two children were born to him and the family grew. The man is hysterical, in distress. He is incapable of giving his family back what they had. His son asks him, 'What's going on here?' His wife asks if he's a man or a dishrag. The man becomes distressed." Neuman says he thinks that the state should have retained the lion's share of the compensation until the construction permits were received.

The party's over

In Yad Binyamin, a small community with a close-knit population, reminiscent of a kibbutz, the story of evacuees who invested with Sror and were beginning to earn profits from the interest spread among the residents. Lior Kalfa, an evacuee from Neve Dekalim and a candidate for head of the Hof Ashkelon Regional Council in elections to be held two weeks from now, says: "Eitan Hadari and Menashe Nagar of Ganei Tal were the stars. They started and they were successful. When they saw it was good, the news began to spread. People saw that it was possible to receive a relatively easy income and were tempted. People saw big money, fast and easily, and that's tempting."

Wasserteil also confirms that "people definitely benefited from this business for a certain period and others followed in their footsteps." One of the evacuees, who invested hundreds of thousands of shekels of his money and canceled his check right before the great collapse, says: "The first time that people gave him money he really did give them a monthly interest payment of 5 percent. That's a fortune. People were pleased, they thought they had made a killing. That's how he managed to raise a great deal of money."

Some of the evacuees describe a phenomenon of overspending that developed at this stage. "For a year and a half people here lived like kings, their standard of living increased, they flew abroad a lot, they bought new cars," says a resident of Yad Binyamin. Today, he says, these people don't know if they will be able to recover and begin building a new house.

At the same time, in Moshav Gilat, Sror also improved his standard of living. One of his neighbors said that "he flew abroad the way I travel to Be'er Sheva." An investigation revealed that Sror purchased two homes in the south of the country as well as a new Chrysler worth over NIS 300,000.

After the first investors received the promised interest payments, many of them left the capital in Sror's hands for additional rounds of investment. A few weeks ago, when the time to redeem the checks from the last round arrived, people discovered that the checks they had were not covered and were not honored at the bank. Only then did they begin to understand that their money had vanished. "All of a sudden the party was over; everyone in the system had put his money into a dubious venture," says a man who served in a senior position in the Hof Aza (Gaza) Regional Council and is familiar with the story.

"Nobody has an estimate of the number of families affected, but there is no question that there are dozens - evacuees from various Gush Katif settlements, including Ganei Tal, Bedolah and Morag. In addition, families from Netivot and apparently from Moshav Gilat suffered as well. Nor does anyone know the amount of money that went down the drain, but investors and people in the SELA administration estimate a sum between NIS 35 million and NIS 50 million. Hertz, the accountant, confirms that those are the sums he has heard about, but says he cannot validate the information.

"People who lost money have spoken to me, and I've heard many things about it," says Kalfa. "There is still a lot here we don't know, but the problem is known and it exists. We're talking about millions and millions of shekels. In Ganei Tal I don't even know how to assess it."

The nice people

Eitan Hadari's name comes up repeatedly in conversations with other evacuees who name him as one of the first investors, followed by many others. He doesn't want to talk about it. "I understand what is being discussed, but I don't want to talk about it," he said. In the end he agreed and confirmed: "It's true that I discovered it along with someone else [but] since February I haven't been in the picture. One man remained who initiated a new group in these procedures."

People invested millions in it.

"I'm not to blame for the fact that they put money into it, especially after they knew that I haven't been involved for a long time because of things I didn't like. I discovered it, but I quickly understood that it was undesirable, and therefore I cut out very soon. Since then, because I cut out so quickly, our relationships soured."

He says that now people are feeling pressured. "They should feel pressured. In my opinion, they made a risky investment, and now they're coming to regret it. As far as I understand, this is a failed investment rather than a scam, but what difference does that make to the investors? They lost the money."

Menashe Nagar, when I spoke to him, indirectly denies that he told others about his successful investment. "People ask me, and I can tell them what to buy, in what to invest - I can tell you that from what I do myself."

Another person whose name came up repeatedly in connection with the Sror investment is Pini Hajaj, owner of the Hai Bituhim insurance agency in Netivot, a familiar figure in the town and Sror's neighbor on Moshav Gilat. According to testimony by investors, Hajaj was a kind of intermediary between them and Sror, and meetings about the subject took place in his office. The victims do not blame Hajaj for the financial loss, and as far as they know, he also lost money in the investment.

Your name comes up in dozens of conversations with people who invested through you with Eitan Sror.

Hajaj: "In principle, there were some issues with that guy. I have no idea whether the nice people did things with him, based on their own decisions. In principle I did business with that man, and that man is all right. There are hitches, as in everything, there were all kinds of issues, but to say that there's a hitch and a problem - I don't know what you're talking about."

Does Sror deal in diamonds?

"Yes, he does, he did."

Did evacuees from Gush Katif invest money with him and receive a nice interest payment for a long period of time?

"I have no idea."

What is your connection to Menashe Nagar and Eitan Hadari?

"Nagar is a client of mine and Hadari became a client of mine on Nagar's recommendation."

And you made the connection between them and Sror?

"Mr. Sror is a local resident here. Whether they saw him in my office at some meeting and heard the story, or decided to do things, I have no idea."

Do you know that there's a problem now with this investment?

"I don't think there's a problem."

Many of the evacuees don't sleep well at night because they invested money with him.

"I don't get into people's affairs, but I don't think there's a problem. They didn't speak to me. You're speaking to me about things that I simply don't know."

Is Sror a client of yours?

"Sror does business with me. He has policies of mine, and I have all kinds of things, his family, all kinds of friends."

So you deny that you were an intermediary between the evacuees and Sror?

"Yes."

Something fishy

It's afternoon in the well-kept community of Yad Binyamin. Many parents and their children go to the small commercial center and the park in the middle of the community. But the pastoral atmosphere is misleading. Residents who spoke to Haaretz, it turns out, encountered criticism from their friends, who warned them not to continue cooperating with the media. And thus, although many families here invested money with Sror, very few residents are willing to talk about it, and only on condition of anonymity. One reason for the fear of exposing the embarrassing affair may be the possibility that investors did not report their income from the interest to the tax authorities, thus presumably breaking the law.

One of the residents explained that people want to deal with the matter by themselves, "in a criminal manner; I'm saying that without whitewashing." He adds, "I was told that one of the crime families is already in the picture and that they're working on bringing the money."

Eli Escusido, the head of the Nahal Sorek Regional Council where Yad Binyamin is located, says that "there are fishy things there, but I have no way of knowing about them. People say they're unwilling to talk, that if it gets out it will spoil things for them and they're taking care of it in their own way. Something like that. Wherever I tried [to find out] I encountered a lack of cooperation."

Avishai Atias, a well-known businessman from Netivot with a business connection to Pini Hajaj, confirms that he invested with Sror at Hajaj's recommendation, but has yet to receive his money. The conversation with him sheds light on the way in which some of the victims are trying to get their money back. "One of the victims went to the gray market [to collect the debt - ed.]. I told him he was doing something despicable. I told him, 'You say that Pini is responsible. You're doing him an injustice. He's not responsible.' I told the guy from the gray market, whom I know, that he (Hajaj) is not responsible for that. If the guy really owes, he'll pay you, but he doesn't owe you. You can't finish off a guy who didn't do anything."

Where is Sror in this whole story?

"That's what hurts me most, that now Eitan Sror doesn't give a damn about anyone. But I'm telling you that Sror will pay, if not today, then tomorrow. People don't want to make too much noise because they want to find the solution. But Eitan Sror will pay. He thinks, he's simply on Acamol now, he's on borrowed time. People aren't attacking him because they've turned him around in all directions and he has no money. They turned him around."

What does that mean?

"They turned him around in the sense they tried every possible way to get the money out of him."

Are you giving up on the money?

"Absolutely not. He knows it too. I told him that to my dying day I'm not giving up. It's not that I haven't tried and haven't involved half the country, but I won't take another step so they'll catch him and I don't know what they'll do to him, because then you get into hot water. It's not worth it to me. I want to see my children every morning and every night when I get home. It's not worth it to me, this getting into hot water. But to give up? Absolutely not. There's no chance."

Nobody knows where Sror is living at present. In a short telephone conversation with him, he said only that "I have no idea what you're even talking about. Whoever turned to you should examine himself well," and hung up.W