Sunday Times

Jacket Notes

- Stephen Timm

Istill remember the call. It was August 2018 and I was attending an event for a tech start-up when my cellphone rang. It was my boss, the late Matthew Buckland. Had I heard, he asked, that Eran Eyal, the South African tech entreprene­ur and founder of Springleap, had just been arrested for fraud in New York?

It couldn’t be, I thought. The Eyal I knew, from meeting him a number of years back, was the last person I would assume would steal millions of dollars.

I wasn’t alone. Most in SA who knew him said the authoritie­s must have got it wrong, that these were likely administra­tive errors and little else. But things were far worse. Eyal, who in December 2019 would be convicted of three counts of fraud in a New York court, following a plea agreement, stole millions of dollars from investors by, among other things, presenting fictitious informatio­n about his investors and clients and touting fake pilots to raise $42.5m via an initial coin offering (ICO) for his start-up Shopin.

In my bid to get to the bottom of things, I wrote numerous articles on the saga for the publicatio­n I edited at the time, Venturebur­n. In late February last year I flew to New York to attend his sentencing. My plan was to interview Eyal, but a few days before I arrived he sent me a WhatsApp message and said he would not be able to speak to me because it might break the conditions of his plea agreement.

On the surface of it, the tech world is full of such reprehensi­ble behaviour –“faking it till you make it”. But Eyal was doing more than that. He was, as I was to discover, lying about it all. As I spoke to more investors and company insiders, the details became clearer. There wasn’t a person he had not fooled. Eyal lambasted my reporting as “fake news”. He also issued various media organisati­ons with a lawyer’s letter requesting that certain stories be expunged from the web, offering “reimbursem­ent” in exchange.

But the details of the investigat­ion left no doubt in anyone’s mind that what had transpired was pure fraud. He’d lied about who had invested in his start-ups, held back tax, got someone to web-scrape profiles of designers and market experts and marketed this as his company’s own database. He twice produced fake copies of printouts of his investment account and spent investors monies on drugs and other personal costs.

In the end, instead of getting a prison sentence, he was made to pay back $600,000 to four investors and was banned from serving as a company official in the state of New York for a year. In May 2021 he was deported to Israel, where he was born. He got off lightly, and we’re left wondering what his next move will be.

‘At Any Cost’ by Stephen Timm is published by Tafelberg, R310

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