Pension Fund Embezzlers Flee To Israel

Canadian Police Chase Them

The two founders, Boaz Manor, 33, and Michael Mendelson, 41, of Portus Alternative Asset Management Inc. were charged by Canadian authorities with a $800 million fraud, money laundering and obstructing justice in an alleged scheme related to the hedge fund firm's collapse.

26,000 Canadians Bilked

Portus, founded in 2002, attracted money from 26,000 investors before it closed following inquiries from Ontario regulators about transactions at the firm. About C$18 million remains missing, and C$110 million was improperly used to pay referral fees and cover withdrawals by investors, according to a May report by KPMG LLP, the firm's trustee.

Off To Israel

The OSC alleged in the fall of 2005 that Portus had improperly diverted $95.4 million. It has laid several charges against Manor under the Ontario Securities Act.

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