Israel’s Securities Authority has launched a criminal investigation into businessman Mr. K. over allegations that he raised more than NIS 200 million from hundreds of investors—many of them from the chareidi community—for a gold mining venture in Ethiopia. Investigators suspect a range of serious financial offenses, though Mr. K. has not been charged and is presumed innocent.

The Israel Securities Authority announced that it has opened a public investigation into Mr. K. on suspicion of committing multiple economic crimes in connection with fundraising efforts for an Ethiopian gold mining project. According to investigators, Mr. K. raised more than NIS 200 million from 219 investors over an eight-year period.

Authorities say the investigation focuses on suspected violations that include offering and selling securities without a legally required prospectus, in violation of Israel’s Securities Law, as well as obtaining money by fraud under aggravated circumstances, theft by an authorized agent, and offenses under anti-money laundering legislation. The alleged conduct is said to have occurred between 2018 and 2026.

For several years, Mr. K. reportedly solicited investments in Ethiopia-based YMG Gold Mining, using companies under his control, including Lakach Investments Ltd. and Dakaria Investments Ltd. As owner and senior executive of those firms, he allegedly played a central role in raising capital and providing investors with updates regarding the progress of the mining operation.

According to investigators, Mr. K. primarily targeted members of the chareidi community, offering them investment opportunities while allegedly promising that their money would double within four years. Authorities further suspect that some funds received from newer investors were used to repay earlier investors.

Investigators also allege that investors were misled through false representations and that Mr. K. exceeded the authority granted to him regarding how invested funds were to be used.

The Securities Authority stated that on February 1, 2026, Mr. K. was instructed to cease raising additional investments after regulators suspected he was offering securities to the public without an approved prospectus. Despite that directive, authorities believe he continued soliciting additional funds.

The investigation remains in its early stages. The allegations against Mr. K. have not been proven in court, and he is entitled to the presumption of innocence.