Cheerfully Changed Clients File Suit to Recover NIS 16.5m

The complainants suing the company are immigrants from English-speaking countries, some lost small amounts, others lost their entire savings - hundreds of thousands of dollars.

A Jerusalem-based law firm this week filed a lawsuit against shuttered financial services firm Cheerfully Changed for NIS 8.5 million. The suit, with 50 named complainants, marks the largest action against the Anglo-friendly money firm since they suddenly shut their doors two months ago, leaving many scrambling to recover money deposted with Cheerfully.

The suit, filed on Tuesday in the Jerusalem District court, is the third court case the Laufer-Haim law firm has filed against the company and its owner, Jonathan Abeles. Altogether, the lawyers represent 90 people who claim collectively nearly NIS 13 million.

Roni Haim - 19082011

All former Cheerfully clients now suing the company are immigrants from English-speaking countries, most of them new relatively new arrivals from North America, according to sources familiar with the case. While some lost small amounts, others lost their entire savings - hundreds of thousands of dollars, the sources said.

Some of those affected by Cheerfully's sudden demise are so "spiritually and financially broken" that they already returned to the U.S. while others were still considering doing so, they added.

After Laufer-Haim filed the first case against Abeles and Cheerfully Changed, on behalf of one person, in Jerusalem Magistrate's Court on July 13, a restraining order was issued preventing Abeles from leaving the country. The order is still in place.

On July 26, the advocates filed a second case, this time at the Jerusalem District Court. The judge granted the firm's request to freeze the assets of Abeles, Cheerfully Changed, and of a second company he owns, called Yatzim Overseas, and placed liens on them.

Effectively that means that as of now Abeles cannot exit Israel and is barred from making any transactions and dispositions in his companies' shares, assets, bank accounts and properties. Bank Mizrahi Tefahot, where the firm had an account, was also named in that case and the latest one for "unlawful negligence in handling the victims money and in managing Cheerfully Changed account," according to attorney Ronen Tiv, speaking on behalf of Laufer-Haim.

The bank's spokesman, Benny Shoukron, declined to comment as the case was still pending.

"The story of the victims is a sad and tragic one," Tiv said. "These are people who weren't born in Israel but decided to tie their fate with this country and made aliyah. All of them wished to live in Israel and make it their home. Most of them brought all their savings through Cheerfully Changed to purchase their home in Israel. All these families lost significant amounts of money - some of them all they had in this world, and thus lost their opportunity to buy a home in Israel."

Another Jerusalem-based lawyer, Amos Fried, has filed about five different suits in the capital's Magistrate's Court on behalf of individual clients who say Cheerfully owes them altogether about NIS 3.5 million. A source close to the case said Fried's clients have bounced checks written by Abeles, which allows them to avoid a drawn-out court proceeding.

Abeles, who grew up in Silver Spring, Maryland, and today lives in Jerusalem, did not respond to several requests for comment.

Founded by Abeles in 1999, Cheerfully Changed was popular among English-speaking immigrants because it offered lower rates and quicker services than regular banks. In June, the firm's six branches in Jerusalem, Beit Shemesh and Modi'in suddenly closed, leaving clients wondering about money they had deposited or wired through the firm.

A few weeks later, Abeles posted a letter on the Internet saying his company has been going through an "extremely difficult time" caused by a "combination of factors including a collapse of a major computer database, market conditions and possible embezzlement." He acknowledged that many clients "suffered anxiously" and pledged to "repay every debt I legitimately owe" as soon as possible.

According to court minutes obtained by Anglo file, Abeles on July 13 told the court that Cheerfully Changed owed money to "about 80 to 100 people." He insisted that the company owes money to its client but that he personally owes nothing to anyone. He admitted, however, that he is the sole manager with signatory power over the company.

Tiv said he does not expect any more people to file suit against the firm.