Sunday, July 3, 2011
English-speaking immigrants fear financial losses as company closes
Jerusalem-based lawyer A. Amos Fried, a Chicago native, says he estimates that millions of dollars may have been lost when Cheerfully Changed closed last week.
The possible collapse of a financial services company heavily frequented by English-speaking immigrants has many scrambling to recoup money entrusted with the firm, in some cases hundreds of thousands of dollars.
Branches of Cheerfully Changed in Jerusalem and surrounding cities have been closed since last week and many customers say they have been unable to reach a representative to inquire about their accounts.
In addition, a statement posted online and comments by former employees who said the company's entire staff was let go this week have spurred concerns the company is bankrupt. According to some estimates, the losses could amount to millions of dollars.
The company and its owner, Jonathan Abeles, have not responded to numerous Anglo File queries for clarification.
Jerusalem-based lawyer A. Amos Fried said he is currently speaking to dozens of people interested in taking legal action against Cheerfully Changed.
"Some have different approaches than others. Some are thinking more in terms of mediation, other are leaning more toward going to court. There's a lot than can be done," he told Anglo File yesterday.
Fried, a Chicago native, said he estimates that millions of dollars may have been lost. "I spoke to a group of, say about 20 people and I would imagine the average loss among them was about at least $50,000 a person. Some people had much more, we're talking about people [who had] $120,000. They transferred $120,000 to Cheerfully Changed and decided to keep it there for a little while - and now there's a big question mark if they'll ever see this money again."
On its website, Cheerfully Changed - which was founded by Abeles, from Maryland, in 1999 - states that it is fully licensed by the Bank of Israel and the Finance Ministry. A Finance Ministry spokeswoman said the ministry gave the company a license for services such as changing money and conversions but not for handling money deposits, which is the responsibility of the Bank of Israel.
Cheerfully Changed does not appear on the Bank of Israel's list of licensed banks, which would allow it to take deposits. "The body mentioned in your query is not known to the Bank of Israel," a bank spokesman said. "The banking law prohibits anyone who has not received a banking license from accepting deposits from 30 people or more and give credit at the same time."
The director of absorption services at the Association of Americans and Canadians in Israel, Josie Arbel, said her organization received several calls from concerned customers this week. "Cheerfully Changed is a known and trusted commodity in the Anglo world," she said. "If the rumors are true [and the company is closing], it will have tremendous implications for other businesses. This will reverberate throughout the Anglo world."
"People are pretty upset," said David B., who works next to the Cheerfully Changed branch in Jerusalem's Wolfson Towers. "The other day I saw a large amount of people outside the store, wondering what's going on, why there were closed. Then a guy came to open the store but said, 'we're not open today.' There was a crowd of people, and one man shouted, 'I need my money.'"
Numerous calls and e-mails to several branches and to Abeles were not returned. A purportedly "official statement about Cheerfully Changed" was posted on several Anglo-Israeli Internet forums recently.
"Jonathan has fallen upon difficult times and made several financial mistakes," wrote Zalman Arnow, who says he has been the manager of Cheerfully Changed's Ramat Beit Shemesh branch for eight years. "He has suffered from bad investments, and it is possible that he himself has been the victim of theft and fraud." Arnow further acknowledged a large number of his customers are "panic-stricken about funds which they deposited or invested" in the company. He is working with the local rabbinical leaders "to assure that the matter is handled correctly," he added.
One employee told Anglo File that he and all of his colleagues in Cheerfully Changed's various branches received letters informing them they were fired as of June 30. Anglo File was not able to independently verify this claim.
Stories of people unable to recoup money or not receiving transfers have begun to proliferate among English-speakers and on online message boards.
"[Cheerfully Changed] currently have money of ours that has not gone into our Israeli bank account but has cleared our U.S. bank," a new immigrant from New York wrote online.
Zohar Flamenbaum said she used the company's services several times since having moved from New Jersey to Tel Aviv last December. Earlier last month, she asked if she could transfer $2,000 (about NIS 6,850 ) and have it deposited in her Israeli account. A representative told her it was no problem and that the money would arrive in her Israeli account within "two to three days," Flamenbaum said. The amount was deducted from her U.S. account on June 15 - but never arrived in Israel.
Flamenbaum, 26, said she sent several e-mails and left numerous voice messages at her branch but was only told that "God-willing" she would receive the money soon, she said.
"My dad is trying to recall the money from my American bank, but because I authorized the transaction it's not likely to happen," Flamenbaum told Anglo File this week, adding that money was tight and she needed it to pay her rent.
One customer, Sorelle Weinstein, said she was able to recoup her money, about $7,000, after telling Abeles she had gone to the police.
Cheerfully Changed - which operates six branches in Jerusalem, Beit Shemesh and Modi'in - was popular among Anglos because it offered financial transactions with better rates and more convenience than banks. Clients used the company to cash checks, exchange foreign currencies and to transfer money from accounts abroad. Some clients also have money deposited with Cheerfully Changed, as the company pays higher interest than banks.
Yitzhak W., an immigrant from the U.S., told Anglo File that the company worked fine until recently, when they began running into problems. "All of a sudden they started having problems with the transfers and with depositing money into Israeli accounts," he said. "Then they didn't have cash, or didn't have checks so that you could no longer get your money when you needed it, sometimes it took several days. The last time I was there they said it would take a week for a transfer to an Israeli account. I kept hearing that they hope that things would straighten out. But apparently they haven't."