In July, 2005, Manor provided KPMG with a list of payments made with investors’ funds. One line indicated he’d spent $11.6-million (U.S.) on “Precious Metals–Precious Stones.” KPMG figured out what had happened to this money when its accountants examined the Freeman Account at Credit Suisse and found that nearly $9-million (U.S.) had passed through it to banks in Hong Kong.
The “precious stones” turned out to be diamonds Manor had purchased. The celebrated gem is an ideal commodity for those who want to transfer wealth across borders without being traced: Diamonds are small, easily concealed and liquid–on the black market.
After Manor arrived in Israel, he had gone to a diamond broker and selected 100 diamonds, including a 22-carat stone worth $4.5-million (U.S.). The stones were then flown to Hong Kong, where they were paid for and picked up.
Why wouldn’t Manor simply have paid and taken possession in Israel? Finnigan theorizes that Manor made the transaction in Hong Kong to make it more difficult for the receiver to track down the assets.
Indeed, the diamonds remain shrouded in mystery, although the identity of the players is known. Manor’s sister-in-law, Jieying Yu, is the founder of a Hong Kong company, Bringood Investments. According to court documents, Manor had Yu pick up the stones from the Israeli diamond broker’s Hong Kong office in the summer of 2005. They then were given to a man named Yitzchak Toib.
Manor had met Toib in Israel through family connections. Manor paid Toib as much as $900,000 in Portus money to fly to Hong Kong and collect the gems. Toib stored them in a safety deposit box in the city. Toib later claimed he returned to China and gave the diamonds back to Yu, on Manor’s orders. She denies receiving them this second time.
The diamonds have never been found. Manor insists Toib has the stones; he launched a lawsuit against Toib, but has allowed it to go dormant. Others believe Manor has the stones himself. “I think Manor did it and he knows where they are and is keeping them for a new day,” says Israeli lawyer David Tadmor, who worked for KPMG on the Manor case.
The lawyers involved say it’s irrelevant where the diamonds are: Manor used investor money to make the purchase. “He basically embezzled the funds and took millions of dollars and bought other things for himself,” says Tadmor. “Whether Toib can produce the diamonds or not doesn’t really matter. It’s Manor who stole the money and bought the diamonds.”
Soon after Manor arrived in Israel in the summer of 2005, KPMG obtained a court order preventing him from leaving that country. Manor responded by taking $700,000 (U.S.) of investors’ funds and giving it to Yehuda Weinstein, one of Israel’s top criminal lawyers and today its attorney-general (most of this money was eventually frozen after Weinstein was informed of its origins). For months, Weinstein told Finnigan that Manor was too ill to be interviewed. At one point, Weinstein arranged to have a psychiatrist interview Manor; the psychiatrist said the young man, suffering from depression and suicidal thoughts, “cried like a little boy.” Manor’s medical issues aside, his lawyer, Brian Greenspan, blames KPMG and Finnigan’s “very aggressive position” as the reason why Manor was unwilling to co-operate.
After months of delay, Manor was finally forced by an Israeli judge to answer Finnigan’s questions. In February, 2006, the lawyer and a pair of KPMG accountants examined Manor in Tel Aviv. Manor’s answers were a surprise: He claimed that Anthony Malcolm, the elderly Montreal lawyer he’d hired to set up Portus’s offshore companies, not only controlled Portus but that he, Manor, was a mere employee of Malcolm’s.
KPMG couldn’t find one shred of evidence substantiating this claim. When Finnigan presented Manor with OSC documents showing his signature on the corporate filings that established Portus, Manor shrugged them off. Mendelson agrees that Malcolm did not control Portus, while Nick Mancini, who was briefly CEO of Portus in 2004, said he’d never heard of Malcolm. “The ownership was around Boaz and Michael,” Mancini says. Malcolm himself denies he controlled Portus or instructed Manor to do anything. “I don’t even want to talk about it, the son of a bitch,…” he said when contacted.
In the end, the examination provided no useful information on the whereabouts of the missing diamonds and other funds. Manor did, however, produce a recording he’d secretly made in the fall of 2005 of a conversation between himself and Yitzchak Toib. At one point, Manor accuses Toib of taking his money, and demands that his “assets” be returned. Toib’s answers are rambling and often incoherent, although he does say, “If you are willing to be patient and get out of the mess and so you can get your money, okay, you can get it. You have no patience–do what you want. Be my guest, I’m not cross…we’re through.” The word “diamonds” is never uttered in the conversation, but Greenspan holds up this tape as evidence that Toib has the gems. “Toib is a liar,” he says.
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