A sophisticated scam has left some of Israel's wealthiest individuals without their money and the private jet services they paid for. Yaniv Salmon, the man behind the scheme, allegedly used client deposits to cover his own debts, leading to a financial debacle that has shocked the elite community.
Key Takeaways
Yaniv Salmon founded Galrom in 2011 to broker private jet flight hours for Israel's elite.
Clients deposited around $400,000 each, expecting on-demand flight services.
Salmon allegedly used these deposits to cover personal debts, leading to insolvency.
Prominent clients have filed lawsuits to recover their funds.
The company is now under court-appointed trusteeship.
The Rise of Galrom
In 2011, Yaniv Salmon identified a lucrative market niche: providing on-demand private jet services to Israel's wealthiest individuals. He founded Galrom, a company that required clients to deposit around $400,000 each. In return, Galrom promised to arrange private flights as needed, deducting the cost from the deposit.
Over the years, Galrom became the go-to provider for private jet services in Israel. The client list read like a who's who of Israeli business, featuring names like Leon Koffler of Super-Pharm, Eyal Waldman of Mellanox, and Drorit Wertheim of Coca-Cola Israel. The company collected substantial commissions for brokering these flights, and Salmon himself became a wealthy businessman.
The Unraveling
However, recent months have seen the collapse of this seemingly successful venture. Prominent clients, including Jonathan Kolber and Asi Shmeltzer, filed lawsuits against Galrom and Salmon, revealing that dozens of clients were owed hundreds of thousands of shekels each. These clients did not receive the full services they had paid for.
In a lawsuit filed in May, Kolber claimed that he had to personally guarantee the cost of a flight when Galrom failed to pay. He alleged that Salmon had taken money from clients in a systematic fraudulent scheme, using it to cover other high-interest loans. The company accumulated debts of NIS 70 million and reached insolvency.
Legal and Financial Fallout
The district court in Beer Sheva appointed lawyer Lior Marcovich as a trustee for Galrom. Marcovich's initial report expressed concerns of fraud, suggesting that Salmon had operated a pyramid scheme. The court's list of creditors exposed the billionaires who had fallen victim to the scam.
Salmon, through his attorney Yariv Vaknin, denied any wrongdoing. Vaknin claimed that the company's decline began with the coronavirus pandemic, which halted its business operations. He argued that funds were used to cover arrears and operational costs, not misappropriated.
The Road Ahead
Salmon is now required to pay NIS 5,000 per month to a creditors' fund. Despite the financial ruin, he is determined to repay his debts and has even agreed to operate the company under court supervision to try and recover the losses.
The fallout from this scandal serves as a cautionary tale for the elite, highlighting the risks involved in high-stakes investments and the importance of due diligence.
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