Personal Group Trustees Seek to Sue Banks for Over 480 Million Shekels
Trustees of the collapsed Personal real estate group are seeking court approval to file lawsuits exceeding 480 million shekels against Bank Discount and Mizrahi-Tefahot Bank, citing alleged supervisory failures over trust accounts.
The trustees of the collapsed Personal real estate group are seeking court approval to file lawsuits exceeding 480 million shekels against Bank Discount and Mizrahi-Tefahot Bank. The motion, submitted to the Central District Court, alleges that the financial institutions permitted the transfer of investor funds from trust accounts to corporate accounts without adequate oversight.
According to trustee CPA Shlomi Philliba, the planned legal actions target more than 105 million shekels against Bank Discount alongside claims directed at Mizrahi-Tefahot. The Personal group collapsed in July 2024, leaving hundreds of private investors facing massive losses after raising approximately 739 million shekels through various schemes promising high returns for urban renewal projects.
Investigation and Ponzi Scheme Allegations
Trustees previously asserted that the enterprise operated similarly to a Ponzi scheme, utilizing capital from new investors to service obligations to earlier lenders. In March 2025, the Israel Securities Authority and Lahav 433 launched a formal criminal investigation into the group and its controlling shareholders, suspecting fraud, theft by a fiduciary, money laundering, and illicit public fundraising.
The core of the current legal filing centers on the mechanics of trust account management. The trustees argue that the banks acted beyond mere technical conduits, maintaining sufficient operational awareness and red flags regarding unusual transaction patterns that should have triggered immediate intervention and compliance checks.
Bank Responses and Next Steps
Out of roughly 554 million shekels deposited across trust accounts during the reviewed periods, only a fraction was secured for designated projects. Representatives for Mizrahi-Tefahot stated that the institution is not a direct party to the motion and will respond through judicial channels if necessary. Bank Discount representatives indicated they are reviewing the documentation before submitting formal legal responses.
