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From Durban to Rikers Island: Jewish entrepreneur’s fall from grace

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Eran Eyal seemed destined for success: a head for business, a love of technology, insatiable ambition, a charming personality, and extreme intelligence. But all this may be what led to his downfall. When he realised that his start-up dream wasn’t going to succeed, he simply reached for more.

Fooling investors and everyone else in his life, he stole and lied shamelessly until the bubble burst and he was arrested in New York City. He spent three weeks at the notorious Rikers Island prison surrounded by rapists and murderers before being released on bail of $250 000 (R3.7m).

How did he get to this point? A new book, At Any Cost: The South African fraudster who took the tech world for more than $40 million by Stephen Timm tells the full story of how a nice Jewish boy who was born in Israel and grew up in Durban, came to be investigated, arrested, charged, and eventually deported. South African business leader Michael Jordaan describes the book as “an age-old narrative about ego and flying too close to the sun as well as a modern version of greed in the tech world”.

When Eyal was released from Rikers Island, it was one of the few times he responded to communication from Timm, who was covering the story at the time. “Literally been through hell. Rikers Island is no picnic. Been sleeping next to murderers and rapists,” he wrote over Facebook Messenger, adding that he was in a cell with 50 other people during those three weeks.

Timm has covered Eyal’s story from the very beginning when he was still the darling of the tech start-up sector in South Africa. Eyal’s first company, Springleap, began as a crowdsourcing platform for t-shirt designs, and then pivoted into a conduit for clients to access thousands of creative professionals.

“When he started Springleap, I think that was meant to be the big ‘Silicon Valley start-up’,” says Timm. “When that didn’t happen, he brazenly committed fraud by paying a Bulgarian hacker a few dollars to ‘web-scrape’ 180 000 profiles, which he then told investors were the company’s network.”

Eyal would go on to employ similar strategies for two more companies, Passo and Shopin. And it worked, because no one looked too closely. The media reported on his success without questioning it, and investors threw money at him without asking what he was doing with it. The result was that he lived his dream: a trendy New York apartment, spending $500 000 (R7.4m) of investor funds on rent, shopping, entertainment, and a dating service. “He was so set on having this lifestyle that he even fooled his landlord about how much was in his investment account,” says Timm.

New York authorities responded to complaints, and began to investigate him, eventually pouncing in August 2018, when he was charged with stealing $600 000 (R8.8m).

“I started writing about it as part of my job [editor at Ventureburn, a South African online publication that covers the start-up sector], but then I really got into the story. It epitomises a big problem in the tech start-up sector globally – the ‘fake it till you make it’ syndrome. Eran’s story represented the dark side of this industry,” says Timm.

“And he was such a nice guy, that I had to keep going to understand where these allegations were coming from. The more involved I got, the more I could see that it was plain and simple lying, that he twisted everything. And he had been doing it for years. So it really is a detective-type story. It reads like a movie.”

From his interactions with Eyal and from what he heard from others, “He’s a really charming person. Very well spoken, intelligent, a gentle soul. No one saw it coming, because he would take you in. Like others who have committed fraud, he convinced all these people to part with their money. Investors say he has the gift of the gab.

“Those who knew him at school – he went to Carmel College – said he always had a way with people. Sometimes I would reach out to acquaintances who would initially respond but then wouldn’t come back to me, maybe because they themselves didn’t believe he could get convicted of fraud.”

Timm says Eyal was born in Israel and came to Durban with his family when he was very young. He is one of three siblings, and “I think a key thing that motivated him is that he has a successful brother, Avi Eyal, who has done really well in the tech and start-up sector. That could be the reason that he wanted success at any cost and to be like his brother, who he looked up to.”

Timm thinks that because Eyal worked so hard and made so many sacrifices, he felt that success was owed to him. “And he also began to believe his own lies. Because he worked so hard and hardly ever slept, he was always on edge. He was close to breaking. He saw the things he did as ‘white lies’ that were excusable because he was suffering so much to build a massive, successful company.

“A lot of this goes on in the tech sector because it allows people to hide behind things. You don’t have a proper product, it’s still being developed, so you can lead people along. And your worth is based on how much money you can raise. So it’s about who is able to pitch the best, and he was highly talented at that.”

Eyal was eventually convicted in December 2019 in a New York court of defrauding investors of millions of dollars through three investment schemes. He pleaded guilty to all charges. He wasn’t jailed, but as part of his plea agreement, he has to refund $600 000 (R8.8m) to four Springleap investors he defrauded. He also had to step down as chief executive of Shopin, and was banned from raising capital or serving in any position of authority in any New York business for three years. Investigators were able to find only $450 000 (R6.6m) of the $42.5m (R628m) Eyal raised in an initial coin offering for the Shopin start-up, and he was ordered to return that amount to the four Springleap investors.

In his sentencing on 26 February 2020, Eyal was told that he would have 48 hours to leave the United States. He was deported to Israel in May of that year. There are already reports that he has travelled to the United Kingdom to see his girlfriend. Many believe he got off lightly. Timm isn’t sure what his next steps will be, but fears he could fall into his old ways, especially in the ‘start-up nation’ that is Israel.

Timm was there when Eyal was sentenced and deported. “They brought him in with his legs and hands shackled. He was wearing a white yarmulke and holding a small Torah. He’s never been a practicing Jew, so I’m not sure if it was to receive benefits in custody, or maybe he was trying to change his life. But you could see he was a man in turmoil. I felt sorry for him.”

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SA Jewry’s pandemic response unique and robust, experts say

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The South African Jewish community’s response to the pandemic has been singled out as unique, efficient, and robust in an academic paper that tracks how the community galvanised itself from March to October 2020.

From the start of hard lockdown, “It became apparent to me that our response as a community was unusually speedy, pro-active, and comprehensive,” says Leah Gilbert on what motivated her to write the paper. “I was impressed with the fact that we used the expertise available among us to inform the community. In addition, the quick emergence of support programmes for people who were infected was unique.”

Gilbert is emeritus professor of Health Sociology at the University of the Witwatersrand, where she taught and researched health and disease in the social context for 35 years. Her daughter and fellow author of the article, Shirli Gilbert, is professor of Modern Jewish History at University College London, and academic director of the Sir Martin Gilbert Learning Centre.

The article has already been accessed almost 1 000 times online, a high number for an academic study of this kind. The authors hope it will be useful for understanding communal responses to the pandemic in South Africa and in other communities worldwide.

Of all the Jewish communities in the world, why did they decide to focus on this one? “During the first lockdown in Johannesburg, observing through my professional lens my society’s relationship to health and disease, I had the idea of documenting our community’s response to the pandemic,” says the elder Gilbert.

“It began with the first SA Jewish Report webinar with medical experts, and the subsequent dissemination and sharing of knowledge and activities,” she says. “I approached my daughter, whose research focuses on the South African Jewish community, and we started collecting relevant material.

“The community’s response to the pandemic spanned the gamut from physical and mental health to religious observance, home schooling, financial relief, food aid, and social-welfare support,” Gilbert says. “The common theme among the initiatives was the efficiency with which resources were mobilised, something possible only because of a robust and highly centralised pre-existing communal infrastructure and strong networks of social capital.”

In their paper, they note that, “The unique response of the South African Jewish community to COVID-19 must be understood within the larger context of the relationship between Jews and health. Scholarship suggests that Jews have a heightened concern for health relative to other groups.”

They also write that “unlike other diaspora communities, in South Africa, a great deal of emphasis has historically been placed on communal unity”. Another unique factor is that “following the transition [to democracy], communal investment in outreach has expanded significantly”.

“Taken together, the centrality of health, robust communal infrastructure, and strong community social capital against the background of the Jewish community’s particular positioning in post-apartheid South Africa helps to account for the uniquely co-ordinated, energetic, and multipronged nature of the community’s pandemic response.”

However, the community also faced many challenges during the pandemic. “The ageing nature of the Jewish community in South Africa meant that the percentage of vulnerable people was relatively high,” says the elder Gilbert.

“This higher risk profile helps to explain the motivation for the quick and powerful mobilisation of resources. There was some friction around the question of how support for Jewish communal welfare fitted alongside South African Jews’ commitment to broader South African society. On the whole, however, evidence suggests that community support for both ‘inreach’ and ‘outreach’ initiatives has been generous and widespread.

“The pandemic has also been difficult for this community in particular because of the extent to which Jewish families are dispersed across the world, which meant long periods of time for families to be apart.”

Another challenge has been resources, especially financial. As they write, “despite the robustness of the community’s infrastructure and its still considerable resources, there are concerns about its long-term health and prospects. On 19 June [2020], the Chev [Chevrah Kadisha] was forced for the first time in its 132-year history to call for emergency financial support. Its work in both residential care and financial assistance – sectors especially impacted by the pandemic – left it severely exposed, and with almost no state support and overwhelming reliance on private donor funds, it was placed under unprecedented strain.

“The community remains highly vigilant, and co-ordinated leadership continues to be delivered by the South African Jewish Board of Deputies, the office of the chief rabbi, and the Chevrah Kadisha, together with other organisations and in partnership with Jewish experts,” they write in their conclusion. “Some cracks, however, are already beginning to show. The extent to which it will be possible to retain the strength and co-ordination of these responses as the pandemic’s severe effects persist remains to be seen.”

They researched their subject by collecting data from all issues of South African Jewish publications during the period under study (March to October 2020). This included the SA Jewish Report, the Cape Jewish Chronicle, Jewish Life, and Jewish Affairs, as well as websites, social media, and other public communications of major communal institutions, the office of the chief rabbi, and Jewish-led relief initiatives and organisations. “The analysis of the data took two months, after which we wrote up the article itself,” says the younger Gilbert.

The SA Jewish Report was one of their prime resources, “since it provided granular detail of what was happening on a weekly basis, both events and ongoing discussions and debates. The SA Jewish Report webinars were also key as they were helping to provide support and access to information that the community needed,” she says.

Asked how they think the South African Jewish community will emerge from the pandemic, they say, “The conclusion [of the paper] is a paradoxical one. On the one hand, the article emphasises the robustness of the community’s infrastructure and its considerable resources, which have allowed it to mount an impressive response to the pandemic.

“On the other hand, the enormous challenges posed by the pandemic have also heightened existing feelings of precariousness and vulnerability within the community. The economic future of largely self-funded Jewish communal organisations is uncertain, emigration is ongoing and possibly increasing, and the self-employed (among whom Jews are strongly represented) have been hard-hit,” according to the elder Gilbert.

Asked if they will conduct research on the South African Jewish community in future, the younger Gilbert says, “My historical research on the South African Jewish community is ongoing. I’m working on a study of German Jews who came to South Africa in the 1930s, as well as a special journal issue on South African Jews co-edited with Professor Adam Mendelsohn. In October-November 2021, I’ll be teaching a six-part online course on Jews in South Africa for the Sir Martin Gilbert Learning Centre. Everyone is welcome.”

  • The academic paper can be accessed by searching “South African Jewish Responses to COVID-19” on Google.
  • The Sir Martin Gilbert Learning Centre course can be accessed by looking at the “What’s On” tab on www.sirmartingilbertlearningcentre.org

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JNF-SA trail commemorates “Great Jewish Escape”

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Between 1945 and 1948, up to 300 000 Holocaust survivors and Jewish partisans were rescued across war-ravaged Europe in preparation to enter British-occupied eretz Yisrael before the declaration of the Jewish state. Yet, the remarkable achievements of the Bricha (escape or flight) Movement have been all but forgotten in Israel today.

The Jewish National Fund of South Africa (JNF-SA) is trying to change that by creating the Shvi Bricha walking trail in the Carmel mountain range in Israel’s north. It symbolises the thousands of kilometres traversed on foot by the Bricha Movement to freedom.

The Bricha – the Great Jewish Escape – was the topic of a webinar hosted by the JNF-SA and the South African Zionist Federation last week.

Pre-eminent Holocaust historian Professor Yehuda Bauer wrote one of the only books on the Bricha, published in 1974. He explained how in July 1944, Abba Kovner, a Jewish partisan commander, travelled to Soviet-occupied Vilnius in Lithuania to convince the authorities to let the Jews leave.

“It was a hopeless endeavour,” said Bauer. Zionist youth movements became active leaders in the Bricha, the clandestine, underground movement to rescue partisans (and later, survivors and those who were hidden) to smuggle them out of Europe.

After the war, millions of people were on the move throughout Europe. At first, there were no separate displaced persons camps for Jewish survivors, and they had to fight for recognition of their Jewish national identity. The Bricha Movement was central to these efforts.

In September 1945, the first shlichim (emissaries) from eretz Yisrael arrived in Europe to co-ordinate the Great Jewish Escape. One was Tzvi Netzer, himself an escapee from Europe just two years before, proficient in German, Hebrew, Russian, and Yiddish. Bricha leaders had to bribe many border officials across Europe to allow people to pass into different countries, from Poland to Romania, Yugoslavia, Czechoslovakia, and Allied-occupied Germany and Austria. They needed graphic designers to forge visas and other official documents. Sometimes, the Jewish groups pretended to be Greeks returning home. They spoke Hebrew, passing it off as Greek to the none-the-wiser Polish authorities. The entire operation was funded by the Joint (the American Jewish Joint Distribution Committee).

Many gathered in displaced persons camps, and then eventually moved on to Greece, Italy, and France and then on to eretz Yisrael by ship as part of “Aliyah Bet” in defiance of the British naval blockade curbing Jewish immigration before 1948.

“It was absolutely amazing,” said Bauer. “It was the largest illegal mass movement in Europe in the twentieth century. Without the Bricha, there would have been no state of Israel. The Holocaust almost destroyed the hope of a Jewish state. Vast numbers of potential immigrants were killed. The displaced persons camps and the Bricha put pressure on the British and United States to help create the state.”

Professor Avinoam Patt from the University of Connecticut is the author of Finding Home and Homeland: Jewish Youth and the Bricha after the Holocaust. He noted that about 75% to 80% of Holocaust survivors were aged between 17 and 35. Most had lost their entire families and their homes. They faced enduring antisemitism in Europe (such as the devastating Kielce pogrom in Poland in 1946) and had to take control of their lives. With other avenues closed and feeling unwelcome in Europe, many embraced Zionism, helping to revive Zionist youth movements decimated in the war. Some set up kibbutzim – communal farms – in Europe, to learn agriculture in preparation for aliyah.

“The Bricha Trail is now an open-air museum and major educational tool of the Great Jewish Escape,” said Dr Omri Bone from the Keren Kayemet L’Yisrael, the JNF-SA’s parent body. He lauded JNF-SA for its efforts to make this become a reality.

Dr Miri Nehari, a clinical and educational psychologist, is the chairperson of the Bricha Legacy Association in Israel. She is the daughter of Tzvi Netzer. “The Bricha isn’t known, spoken about, or researched in Israel,” she said. “The Shvi Habricha is the only commemoration for the Bricha Movement. The association receives no funding from the state. Its main argument is that it didn’t take place on the soil of Israel.” She says the neglect of the Bricha reflects a deeper ambivalence about the Holocaust and its role in the formation of the state of Israel.

Hopefully, JNF-SA’s efforts will start to change all that.

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Taliban takeover – a booster shot for radical Islamists

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The rapid assumption of power by the Taliban in Afghanistan as the United States (US) withdrew its forces will have ramifications far beyond Central Asia, not least for Israel, according to veteran US diplomat and academic Ambassador Dennis Ross.

Ross, who advised the Clinton and Obama Administrations, was interviewed by Carly Maisel in a Lockdown University webinar, broadcast by the Rabbi Cyril Harris Community Centre on 28 August.

“Begun in 2001, Afghanistan was the longest war in US history,” Ross said. “Afghanistan is known as the ‘death knell of empires’, as discovered by the British, the Soviets, and now the Americans.”

President Donald Trump wanted the US out of Afghanistan, what he called a “forever war”. From a high of 150 000 US troops, there were just 2 500 remaining when Joe Biden assumed office in 2021. He, too, was determined to leave Afghanistan. In spite of investment of more than $85 billion [R1.2 trillion] in the Afghan army over 20 years [and more than $1 trillion (R14.6 trillion) spent on the war in total] “there was massive corruption and poor morale. It was a hollow force,” Ross said.

After being vanquished in just six weeks in 2001, the Taliban melted away, bided its time, and regrouped, drawing support from local populations and neighbours such as Pakistan. “Afghan governments looked like foreign implants; they were corrupt and lacked credibility. This helped the Taliban gradually rebuild itself,” said Ross.

The new Taliban government wants international support and recognition. It has therefore sought to project a more moderate image than it had in its first stint in government from 1996-2001. Its pronouncements about being more tolerant towards women’s rights, for example, don’t convince Ross.

“The risk is that the Taliban victory acts as a recruitment tool – a booster shot for radical Sunni Islamists. They have portrayed the US withdrawal as a great victory on social media. They want to show they’re back in business,” said Ross.

So what effect will it have on the region and wider international community?

Iran has a history of hostility and suspicion for the Taliban. They almost went to war in 1998, after the killing of nine Iranian diplomats by the Taliban. Also, the Taliban are radical Sunni Salafists who see Shia Iran as heretics; neither side is tolerant. The Taliban has profited from the opium trade from Afghani poppy fields, fuelling drug addiction in Iran.

Nevertheless, the two have been building a relationship over the past few years, including Iran arming the Taliban. “They have a shared desire to see the defeat of the US everywhere, and seek its humiliation,” said Ross. “Their commentary has been gloating.” He predicts that the new Iranian government will be even more confrontational with the US, and will “want more, for less” in any renegotiated nuclear deal with the US and its allies.

Israel has received support from the US, which has resupplied weapons to Israel after the clashes with Gaza, and continued financial support. “But Israel has always told everyone that ultimately, it needs to depend on itself. This has always been part of the Israeli ethos. It will never ask the US to die for it. Israel will defend itself by itself. The American experience in Afghanistan has only deepened this sense,” said Ross. The security establishment wants the US to re-enter the Iran nuclear deal not because it thinks it’s a good deal, but so that it can buy the time Israel needs to stop Iran acquiring nuclear weapons, by force if needed.

Pakistan has provided sanctuary for Taliban leaders, partly to undermine Indian influence in Afghanistan. It has suffered heinous terror attacks by the Taliban, but sees everything through its struggle with India. The world must be wary of a nuclear-armed Pakistan, with growing radicalism.

Russia hasn’t rushed to recognise the Taliban government. It has kept its embassy open, and has a “wait and see” attitude. By conducting military exercises in the former Soviet republic, Tajikistan, President Vladimir Putin is sending a message to the Taliban and other radical Islamists: don’t mess with us, according to Ross. But, “Russia, too, will celebrate every US defeat.”

China may seek to exploit large lithium deposits in Afghanistan, but it, like Russia, fears Islamist insurrection in its vast territory. Getting to the lithium would require major investment, and China may incorporate it into its “Belt and Road” initiative – a grand plan to build supportive infrastructure on China’s main trade routes.

“China and Russia will seek to take some advantage, but will both tread carefully because of profound suspicion of the Taliban,” Ross said.

Looking ahead, Ross said there could be civil strife within the Taliban. “We may face a mess for some time to come in Afghanistan. I’d love to say we achieved something, but at what price? We hoped we would see competence after the chaotic dysfunction of the Trump presidency. It sure doesn’t look like it. We’ll need some foreign policy successes.”

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