Avy Lugassy, a senior executive at Swiss bank Hyposwiss Private Bank in Geneva, has been arrested on suspicion of large-scale fraud. Lugassy, who was born in Israel and has lived in Switzerland for decades, is suspected of stealing bank customer accounts.
According to reports in the Swiss media, the scale of the theft is 30-40 million Swiss francs (100-140 million NIS). Israeli sources say the amount could be in the tens of millions of dollars. The bank manages some seven billion Swiss francs. Lugassy was arrested on September 5 after being suspended by the bank, and his arrest was extended for three months.
The arrest came following a routine check carried out by the bank itself, during which irregularities were discovered in documents. The bank contacted the police to file a complaint, as well as the banking regulator in Switzerland. The file has been sent to the Public Prosecutor in Geneva and the bank continues to cooperate in the investigation.
According to the report by Swiss business website Bilan, Lugassy admitted the facts during a hearing and disclosed the accounts that had been affected by his embezzlement. Lugassy explained that he had “fallen into the trap in order to cover up the massive losses of one of his longtime clients in 2015, and that the scheme was complex and sophisticated enough to circumvent the bank’s internal rules and procedures and defraud its customers”. The suspicion is that the customers received false documents attesting to deposits which were in fact never made.
Lugassy’s attorney is Adv. Philippe Grumbach, who is very well known in the Jewish community of Geneva. In response to the “Globes” inquiry, Grumbach replied, “I have no comment. I can confirm that I represent him with my colleague David Bitton, but I will not respond.”
A quarter of Hyposwiss clients are Israeli
About 25% of the bank’s customers are wealthy Israelis, some of whom have been affected by Lugassy’s actions. Among them are Israeli business figures who have done business in Eastern Europe. Lugassy worked with Israeli clients, some of whom he was in direct contact with.
“Globes” learned that Adv. Benny Baratz of the law firm Pearl Cohen Zedek Latzer Baratz represents the bank’s affected Israeli clients, who intend to file suits through him against the bank and against Lugassy. Baratz declined a request for “Globes” to comment on the matter.
The case caused a stir in the Jewish community of Geneva, and many Israelis know Lugassy for his philanthropic activity at the Keren Hayesod (United Israel Appeal) in Geneva. At the bank and among Lugassy’s acquaintances, people were very surprised by the allegations. His relatives, who have known him for years, describe him as a good person, very active in Israeli causes.
In 1989, Lugassy became active in the Young Leadership division of Keren Hayesod, which is part of the Jewish Agency and was established to raise funds for the World Zionist Organization. Four years later, he was elected president of Young Leadership. Since 2015, he has been chairman of the Keren Hayesod campaign in Geneva. Keren Hayesod is a social circle in Geneva that organizes events in luxury banquet halls and fundraising events attended by personalities from the worlds of business and the arts. The events bring in large sums of money. Lugassy would host Israeli delegations at fundraising parties, with celebrities among them. According to reports, the events were watched by Tzipi and Bar Refaeli and former Mossad chief Tamir Pardo.
Lugassy was born in 1962 in Kiryat Gat, and was fifteen when his parents moved to Geneva. His father was a banker and first emissary of Keren Hayesod in Switzerland. He returned to Israel to enlist in the Israeli army, and at the end of his military service he returned to Geneva and in the early 2000s started working at Atlas, a bank owned by Maurice Dwek. The bank was taken over by the Swiss holding company Mirelis, and its activity was then merged with that of Hyposwiss. During the merger, Lugassy brought his clients with him. He married Marcella Dwek, daughter of the late Maurice Dwek, who held shares in Hyposwiss. They have adult children and are now divorced.
The bank, which has its main branch in the center of Geneva, specializes in private banking, and has significant activity with Israeli clients who have made investment exits. Over 70% of the bank’s shares are owned by the Lawi family, and the bank’s president is Solly Alain Lawi.
In 2016, the bank bought the business of the Swiss branch of Israel Discount Bank IDB Swiss Bank for $11 million. At the same time, it opened a representative office in Israel, located in Herzliya. In 2019, it bought the Swiss operation of Bank Hapoalim, and in 2021 that of Mizrahi Tefahot Bank for NIS 160 million. Over the years, he has gained more and more Israeli clients, and last year they made up 25% of his clientele.
Avy Lugassy has not been convicted of any crime and is entitled to the presumption of innocence.
Published by Globes, Israel business news – en.globes.co.il – September 21, 2022.
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