Record jail sentence for Israeli money launderer after Sydney trial

In short:

Shabtay Yaacoby has been sentenced to 14 years in prison for laundering more than $50 million of scam funds.

The sentence is the longest ever for a money laundering offence in Australia.

What's next?

Yaacoby will be eligible for parole in January 2035.

An Israeli man has been sentenced to 14 years in prison for laundering more than $50 million of scam funds.

Shabtay Yaacoby, 56, will be eligible for parole in nine years.

Justice Averre handed down the sentence in the NSW District Court today, saying Yaacoby had played a "leading role" in a criminal enterprise.

The sentence is the longest ever for a money laundering offence in Australia.

Yaacoby was a director and shareholder of licensed digital currency exchange Blue Star Exchange, which purportedly allowed customers to buy and sell cryptocurrencies.

One New South Wales man testified that he was scammed out of about $4 million from the superannuation fund he shared with his wife. He had sent the money to Blue Star Exchange, believing he was putting it into a high-interest term deposit.

The man was one of 39 victims who testified at the trial. Each of them had sent money to Blue Star Exchange, or other businesses linked to Yaacoby, for purported investments, which they later realised were fraudulent.

In May, Yaacoby was found guilty of money laundering after a 13-week jury trial.

His offending was "not isolated" and was "persistent", the judge said.

While Yaacoby was not involved in the scamming itself, he was knowingly working with the fraudsters to move the stolen money out of Australia.

He was arrested while visiting Sydney in November 2023. The court heard he was in Australia to attempt to unfreeze multiple bank accounts related to his business.

Troubled life not relevant to seriousness of crimes

The court heard that Yaacoby had played a "heroic" role during the Bondi massacre, while on bail awaiting his trial late last year.

Yaacoby reported to a psychologist that he used his body to shield the 10-year-old child of a Rabbi during the terror attack, having lost sight of his wife in the chaos.

This experience, combined with a history of sexual abuse and experiencing armed combat as a young man in the Israeli Defence Force, led to a diagnosis of post traumatic stress disorder (PTSD).

Yaacoby also suffered from "cocaine-induced psychosis" during and after his period of offending, after starting to use the drug in his late forties, the court heard.

Justice Averre found that Yaacoby's mental health was not a factor in the seriousness of the offending, as it did not affect his ability to plan or understand his crimes, and noted that there had been no reparation offers made to the victims by the offender.

In his sentencing, Justice Averre instituted a reparations order for the victims.