Arrest Warrant Issued for Prominent Canadian-Israeli Businessman Accused of Fraud

Nathan Jacobson, who until recently served as chairman of the Canadian branch of Nefesh B'Nefesh and sits on the boards of Tel Aviv University and the Tel Aviv Foundation, failed to appear at a pre-sentence hearing in San Diego.

A U.S. judge has issued an arrest warrant for a prominent Canadian-Israeli businessman who until recently served as chairman of the Canadian branch of Nefesh B'Nefesh and who serves on the boards of Tel Aviv University and the Tel Aviv Foundation.

There are no suspicions of impropriety tied to the organizations with which he has been associated.

A spokesperson for the U.S. District Attorney's Office in the Southern District of California confirmed on Thursday that a warrant for Nathan Jacobson's arrest was issued by Judge Irma E. Gonzalez after the 57-year-old businessman failed to appear at a pre-sentence hearing in San Diego.

The spokesperson, Debra Hartman, would not comment on whether an international warrant for Jacobson's arrest would be issued.

According to a 2006 grand jury indictment - which Judge Gonzalez agreed to unseal at the hearing in response to a motion - Jacobson and 17 others are accused of multiple counts of fraud, money laundering and the distribution and dispensing of a controlled substance in connection with the Costa Rica-based Affpower, an online pharmacy that sold and shipped drugs to U.S. patients without prescriptions from 2004 to 2006.

According to the court documents, which were unsealed after Jacobson's July 30 no-show, Jacobson pleaded guilty in 2008 to laundering $46 million in drug payments via his Malta-registered, Tel-Aviv-based credit card company, RX Payments Ltd. That plea was sealed because the Winnipeg, Canada native was cooperating with federal investigators, according to a motion filed with the court by Patricia Holmes, who sought to withdraw as Jacobson's attorney.

The precise whereabouts of Jacobson are not known, though according to one source he might be in Asia, Canada's Postmedia news agency reported last week.

Jacobson's Canadian online clearing company, Paygea, Inc., reportedly handled payments for adult websites and gambling sites after it entered the Israeli market in 2008. The company sponsored the Maccabi Tel Aviv soccer club, which placed Paygea's name on the team uniform for the 2009-10 and 2010-11 seasons, a Maccabi official told Anglo File yesterday.

Last April, Paygea suddenly ceased its operations in Israel.

A businessman with interests in the United States, Russia, Ukraine, Kazakhstan and Iraq, Jacobson served in 2004 as founder, president and CEO of the now-defunct - one of Israel's first online pharmacies - along with IDF Maj. Gen. (res. ) Doron Almog. Gen. Almog declined to comment on the arrest warrant.

That same year, Jacobson described his online pharmaceutical business model during testimony before a U.S. Department of Health and Human Services task force on drug importation, stressing the efficacy and integrity of his company.

A colorful figure who has often spoken in the press of his poverty-stricken, Hebrew-school upbringing, his Jewish identity and Zionism, Jacobson holds dual Canadian-Israeli citizenship and has served in the IDF. He has been active in Jewish philanthropic causes in Canada and Israel, serving as the Canadian chairman of Nefesh B'Nefesh. He is listed on the organization's 2010 U.S. tax filing as a member of its board of directors.

He is also listed on the website of Tel Aviv University as an elected member of its board of governors and on the website of the Tel Aviv Foundation as a member of its board of directors, as well as numerous other international institutions and Jewish organizations.

"Jacobson has not been on the board of [Nefesh B'Nefesh] since 2010," a spokesperson for Nefesh B'Nefesh, Yael Katsman, wrote in an e-mail to Haaretz. "We have not had any contact with him since."