"The CEO impersonated a senior officer in the Air Force, forged documents, deceived, lied and defrauded the company," claims the startup PromAI in a lawsuit for 10 million shekels (approximately $2.8 million) filed with the Tel Aviv District Court.
According to the company, following an investigation conducted by the Wizman-Yaar investigative agency, it was revealed that the recently departed CEO, Erez Ben Yishai, from Moshav Sitria—who was also the romantic partner of the company's largest shareholder and founder—allegedly forged documents, including those related to a supposed development contract with Boeing, using ChatGPT.
According to the lawsuit filed on Sunday, PromAI, which employs approximately 40 people and operates out of Tel Aviv, developed a technological product designed to improve the transfer of critical information to production lines and reduce malfunctions. The company, founded in 2022 by Dr. Diana Olga Goren-Bar, an expert in artificial intelligence, raised $7 million from private investors. It is represented by attorneys David Forer and Limor Levy.
The lawsuit states that Goren later met Ben Yishai, who claimed to be a test pilot and a reserve officer in the Air Force with the rank of brigadier general.
"The defendant fraudulently gained Dr. Goren's trust, leading to a personal relationship between them. It has now become clear the defendant is married and simultaneously living with another woman. The stories he told Dr. Goren about being away from home at night for operational and military purposes have proven to be lies," according to the lawsuit, which continues: "Based on the defendant's fraudulent representations, he was granted 12% of the company's shares by Dr. Goren upon its establishment and was appointed as the CEO."
The lawsuit further states: "Over the past year, the company has been working on producing products allegedly ordered by Medtronic and Boeing, two globally renowned companies. These contracts were prestigious and, if fulfilled, would have provided the company with significant reputation and revenue."
"Just days before this lawsuit was filed, it became apparent that the defendant forged all of the contracts and agreements between the company and Medtronic, Boeing and another company. This means that for the past year and a half the company has been working on manufacturing products that were never ordered—neither by Medtronic, Boeing, nor anyone else. All expenses, approximately 20 million shekels (about $5.6 million), were wasted."
Get the Ynetnews app on your smartphone: Google Play: http://bit.ly/4eJ37pE | Apple App Store: http://bit.ly/3ZL7iNv
The lawsuit claims: "The damage caused to the company is enormous. The company had a product in its initial stages, but due to the defendant's fraudulent actions, it invested nearly all its resources into preparing products that were supposedly ordered. This prevented further development of the product for real and legitimate customers."
Attorneys Ariel Shmuel and Avital Kadron, who represent Ben Yishai, responded: "Our client denies all allegations against him. These claims are baseless and entirely fabricated. Our client acted lawfully in his role as CEO of the company, and there was no misconduct. Due to the actions of certain individuals in the company, our client suffered significant personal and financial harm. His name being dragged into this matter is a mistake, and he bears no responsibility. On the surface, it appears to be a business dispute between parties, and our client is not involved."
Attorneys David Forer and Limor Levi, representing PromAI, stated: "As detailed in the lawsuit, the Wizman-Yaar investigative agency documented the defendant admitting to the actions both in writing and verbally. In light of this, the denial by his attorneys is strange. The defendant should assist the company in repairing the extensive damages he caused."