Madoff of Denver arrested after year as fugitive in Israel

jerusalem  |  Arnold (Arnie) Zaler, who fled to Israel last March to escape 30 counts of fraud in Colorado, has flown back to the United States and turned himself in after allegedly scamming numerous Israelis during his 11 months in the country.

Zaler, 59, dubbed “the Bernie Madoff of Denver” because he had been charged with a Ponzi scheme and preying on Jewish clients, was arrested at an Atlanta airport Feb. 20 on arrival from Tel Aviv.

A former hot dog king, he had lived for almost a year as a fugitive in Jerusalem before returning home voluntarily, apparently after Jerusalemites he allegedly swindled informed the FBI of his whereabouts, authorities said.

One friend said he had learned recently that the United States was about to ask formally for his extradition. “He knew an extradition order was coming, and he had come here on forged travel documents,” she told the Jerusalem Post Feb. 22. “But he told so many lies it was hard to know what was true.”

Although Zaler is suspected of having swindled a number of Israelis, no complaints were filed with police.

Zaler attended synagogue regularly in the Rehavia neighborhood and created a network of mostly Orthodox immigrant friends and acquaintances.

According to one source, he had been negotiating a deal with Supersol to import kosher hot dogs to Israel, while another said he had been looking for investors to open a restaurant in Jerusalem.

Another source said he had been involved in a “Paul McCartney swindle,” using the English-speaking Jerusalem-based Web site Janglo to scalp what were said to be VIP tickets to the singer’s concert in Israel last year.

Friends and associates called him a charming con man and womanizer.

“He was bright and politically very articulate,” said one. “We also got contradictory details about his family from him, but it was only when some of us decided to Google him that we understood we needed to be careful.”

FBI agents took Zaler into custody as he got off a plane at the Hartsfield-Jackson International Airport on Feb. 20, FBI spokesperson Kathy Wright said.

Zaler, who served prison time for an Arizona fraud conviction in the late 1990s, was indicted in Denver in February 2008 on new fraud charges of allegedly faking $1.5 million in orders for his hot dog business.

Facing 30 counts of bank and wire fraud, Zaler promised not to leave Denver and was released on an unsecured $25,000 bond. He handed over his passport to the authorities, as required, but then a few days later, in March 2008, used a different passport to fly to Israel.