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Wednesday, May 7, 2003 - Page updated at 12:00 AM

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Local mover's woes reflect a disturbing national trend

Seattle Times consumer-affairs reporter

A criminal investigation into a local, Israeli-run moving company, spurred by consumer complaints about deceptive practices, adds to what other movers and diplomats say already is a troubling national pattern of corrupt companies, often operated by Israelis, that treat customers as prey.

"They are giving us (the industry) a bad name, and burning the good companies that might also be Israeli," said Avi Shriki of Galil Moving & Storage, with offices in Brooklyn, N.Y., and Bayonne, N.J.

An Israeli diplomat recently acknowledged a "very disturbing concentration of Israeli kids" in moving-business scams.

Seattle-based federal agents are investigating one-year-old Nationwide Moving Systems of Woodinville, run by Israeli national Erik Deri and his American spouse, Tanya Deri. Numerous customers have accused the company of luring them with low-ball estimates and then inflating the price once the goods are loaded and holding their possessions until the higher price is paid.

Similar charges have cropped up against moving companies in Florida, California and New York, resulting in prosecutions for fraud and extortion. To a significant degree, those implicated are Israeli nationals, records show.

Last week the company's lawyer said Nationwide had taken all customer complaints seriously and addressed them, a contention consumers dispute.

The lawyer, Casey Ingels, said his client would pay fines to settle several civil violations, including operating a motor vehicle without required insurance and failing to implement an alcohol- and drug-testing program for drivers. The violations were listed in a compliance review recently undertaken by the Federal Motor Carrier Safety Administration (FMCSA), which regulates household-goods movers.

Erik Deri has denied cheating or misleading customers or otherwise mistreating them. In an interview in February, he said that often customers underestimated how much stuff they had.

Nationwide's troubles appear to be part of a troublesome pattern involving moving companies operated by some Israeli nationals.

Asked about the number of Israelis who get caught up in moving scams — including 60 of 74 individuals indicted in Miami earlier this year — Mark Regev, spokesman for the Israeli embassy in Washington, D.C., last week said he was aware of a problem.

One West Coast consulate official even admitted that an Israeli mover had defrauded him.

Regev suggested it was possible "that a few of the leaders of these illegal operations are Israeli and then bring in young Israelis naturally."

Yaqou ("Jack") Yeroshalmian, an owner of Kirkland-based Jordan River Moving & Storage of Kirkland, and partner Sharon (Sean) Joseph, said that not all Israeli movers are crooked. Yeroshalmian, who carries an Israeli passport, noted that earlier this year his company complained to the state Utilities and Transportation Commission about Nationwide's failure to be properly licensed in this state and its lack of insurance.

Jordan River until recently was based in Woodinville and used the same warehouse as Nationwide. Joseph said he got tired of dealing with Nationwide's angry customers who would come looking for the owners and started to take their frustration out on Jordan River. "For each coin there is two sides," said Yeroshalmian, referring to the bad rap Israeli movers sometimes get. "We are totally different."

Jordan River has drawn some consumer complaints, but it also has many satisfied customers, records and interviews show.

"We are very glad that these (criminal) investigations are going on, and putting a stop to these scam companies, because it's hurting my business," Yeroshalmian said. "It's hurting the industry in general."

Consumer complaints about the moving and storage industry filed with the national Council of Better Business Bureaus mirror the growing problem. Last year, it fielded more than 9,000 complaints, more than three times the number in 1996.

Regulators and moving-industry experts trace the steep rise to a couple of developments. One is the 1996 dismantling of the Interstate Commerce Commission, which used to police the moving industry much more heavily than is done today by FMCSA.

The other is the growth of the Internet, which has proved to be a cheap, effective way for unscrupulous movers to attract naïve, bargain-hunting customers.

Shriki, the New York-area mover, said he believes the problem originated in New York City. There, he said, the moving industry has become so overgrown with corruption that some companies have relocated or sprung up in markets where customers are less clued in about scams, he said.

Shriki, who claims both U.S. and Israeli citizenship, is operations manager for Galil Moving. The company started operating in the late 1980s and gets good marks from the New York Better Business Bureau, the New York state Department of Transportation and federal regulators.

Israelis have dominated the moving industry in New York for about a decade, displacing the Irish and Italians, said Shriki, 38, who was in Seattle last month to spend Passover with his brother.

A moving company named Moishe's Moving started the ball rolling for Israelis in the mid-1980s, said Shriki, who broke into the business with the firm. The owner "brought a lot of Israelis (to the company) because he knew they worked much harder than Americans ... and he was going nonunion."

That meant doing away with "cigarette break, lunch break, drink break, all kinds of breaks," Shriki said. It also meant offering consumers the option to move when it was convenient for them instead of only on weekdays.

But in the early 1990s, another Brooklyn company run by Israelis with a "different mindset" got established, he said. It viewed customers as prey.

Often the Israelis who join the moving companies are young men fresh out of the Army looking to see the world before they settle down. They are attracted to New York because so many Israelis already live there, and by the lure of "easy money," Shriki said — sometimes more than $6,000 a week.

Shriki said the corrupt companies "have developed a whole bible on how to cheat customers."

For example, a foreman will arrive and be very kind and friendly, and make the customer feel relaxed, Shriki said.

As the move progresses and more items get loaded, the foreman gradually informs the customer that he's actually got more stuff than originally estimated. Then the foreman offers a deal: Instead of charging another $500, he'll ask only $300 more. "The customer thinks he got a good deal," Shriki said.

A bill recently introduced in Congress would extend to states the power to enforce federal regulations that the FMCSA now carries out only as a secondary duty.

But the industry's chief trade group, the American Moving and Storage Association, is resisting aspects of the legislation, worried it could expose movers to frivolous state-court lawsuits alleging deceptive practices.

Peter Lewis: 206-464-2217 or plewis@seattletimes.com

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