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  KD MAGAZINE! 
Posted:
February 11, 2007 - כ"ג בשבט, תשס"ז
 
 
 
       
   

Considering a new career as a money changer, or making big bucks on the black market? By the end of this article, you may have changed your mind. Despite the potential for profit, there are many drawbacks. Ruchama Paz rings up the totals: busy day and night, bounced checks, sleight-ofhand thievery, outright stealing. And that’s without even touching on the question of legality, that is, is the money on the table or under it?

By Ruchama Paz

Something about the body language of the young man set off warning bells for Reb Shmuel Deutsch, the secondgeneration, highly experienced money changer in the Geula neighborhood of Jerusalem. The youth standing before him had asked to change a check of 450 Israeli shekels to dollars, a daily occurrence for the money changer. But even though a relatively paltry sum was involved, Reb Shmuel didn’t open his money drawer. The boy’s eyelids were fluttering a bit too fast, his mouth had trembled when he made the request, and his face was somewhat pale. There was no need for a lie-detector test. Reb Shmuel knew that something was off, or as money changers often say, didn’t smell right. 

“From whom did you get this check?” inquired Reb Shmuel. “From my brother,” the young man answered quickly, his teeth chattering slightly. “My brother has a telephone. You can call him and ask him yourself,” he added. Reb Shmuel didn’t try the “brother’s” number. He was certain whoever answered the telephone had been primed beforehand. Instead, Reb Shmuel called the telephone number printed on the check’s account holder information. There was no answer. Reb Shmuel wasn’t taking any chances, and showed the boy and his check the door, noting that the boy was joined by another boy waiting just outside, whose miniature yarmulke was nearly lost in his full head of hair. In the normally overfull day of a “changer,” the whole incident may simply have been forgotten, but the next day a man in his forties came into the same office.

 “I heard that you found a check of mine yesterday, and I have to know where,” exclaimed the man, who presented himself as a rebbe in a nearby Talmud Torah. The rebbe’s briefcase, with all his personal effects and his wallet, had disappeared the day before during school hours. The rebbe was not merely worried about the monetary loss, but also about the fact that the robbery had been carried out at a Talmud Torah. Reb Shmuel Deutsch and his staff quickly put two and two together. They told the teacher that although money changers prefer to stick to the business of dollars, and not education, they could show him a video of the previous day’s customers if he promised that the boy would not be kicked out of school. When he watched the video, the teacher had to sit down. The best and brightest of their students was on the video. It turned out that this boy, and he was indeed a good boy, had fallen under the influence of one of the school’s cleaning crew, who during the day had asked the boy to cash a check for him. That the check had been stolen from his rebbe’s briefcase — an “insignificant” detail — the frightened young man didn’t know.

 Registered or "Black Market" Behind a shtender in yeshivah or kollel, or behind a thick security-glass partition, the managers of money-changing institutions that we spoke to would not be overshadowed by banking professionals. Some of them are already third- or even fourth-generation financiers, a business that dates back to the Turkish era. The work is divided into two main parts: exchanging dollars (and sometimes euros) for shekels according to the shekel’s exchange rate, and cashing checks. 

Some money changers are registered and certified, and function much like a bank clerk. Others answer to the name “shvartze soicher” (black marketeers). These individuals either gently hung up or slammed down the receiver when asked to be interviewed for Mishpacha. “Change money?” they answered in astonishment, as if they were unfamiliar with the term, “you must have mistaken me for someone else.” It was only after invoking many generations of the reporter’s yichus, including those of his uncles, cousins, and close friends, that sealed mouths opened. “And only without initials, or any other identifiying details, please.

” It’s not an easy life. Each one has been stung by the experience of theft. The concepts of lunch break, off duty, or too late at night doesn’t exist. There may be a knock at their front door, even as the clock’s hands are pointing one or more hours after midnight, or as the sirens are announcing the entrance of Shabbos. They are also used to hearing the request: “Just do me a favor, cancel the surcharge.”

 “A money changer who doesn’t establish clear boundaries will find himself counting out bills twenty-two hours a day,” warns Reb “Moshe.” “I, for instance, only change money three hours a day in the yeshivah. The rest of my time I learn with a chavrusa. During the rest of the learning seders, to not be tempted, I leave the money at home. I don’t allow the rest of my family to join in the business.” 

Reb Shmuel Kreuzer from Beitar and Reb Shmuel Deutsch don’t normally change money from their homes, except in highly unusual and unexpected situations. “I don’t want to spend my whole day doing exchanges,” explains Reb Shmuel Kreuzer. Reb “Moshe” tells the story of someone who came to change a hundred dollars a few minutes before Shabbos in Jerusalem. And, no, the money wasn’t preventing him from buying food for Shabbos. “So what business are you conducting minutes away from the beginning of Shabbos?” asked Reb “Moshe.” “I finished all of my preparations for Shabbos, and didn’t have anything else to do. I thought this would be a good opportunity to change these hundred dollars that have been lying around for a few weeks,” the man explained. 

All money changers must battle the more or less daily requests for loans. “In special emergency cases I may extend a loan,” said Reb “Moshe.” “But with these cases, I explain that this is my livelihood, and if I wanted to open a gemach [free loan society], I would do it without any connection to my business.”

Do customers complain a lot about the exchange rate? “I don’t change dollars according to a currency exchange rate, but rather according to a platform market rate,” explains Reb Shmuel Deutsch. For example, at the beginning of the year, January 1, the exchange rate isn’t set on Sunday, nor on the second day because of the holiday celebrations. When people come to me on Tuesday expecting the rate advertised in the newspaper on Friday, this is totally unreasonable. The flat rate of the dollar has changed completely in the business world during those two days. But I rarely have the fifteen minutes necessary to explain international finance to each customer. During busy times, I calmly explain to the complaining customer, without being insulting, that if he wants to wait I can explain it fully to him. Or he has another option, to trust me.” What bothers money changers even more is when the customer goes around to a few changers, and then asks me to change at a rate that is most profitable for him. “Shmerl across the street will give me a rate of 4.25 shekels to the dollar, and Itzik will give me a rate of 4.26. So you give me 4.27 and we’ll do business.” 

"I believe in the rule that in business there are no friends, and won't allow thievery in the name of friendship. This rule prevents my circle of friends  from the start," said Reb Shmuel Kreuzer.

Bad Publicity (Or How to Run a "Smear Campaign") An experienced money changer’s most frequent customers are members of his community. The axiom “Don’t mix friendship and business” is the antithesis of what a chareidi money changer does. But what’s to be done when one of your best friends signs a check and it bounces? Situations like these cause difficult dilemmas of friendship or livelihood?

 “I will run after the money, but not to all costs,” says Reb Moshe. “I will try to remind and to nudge him a bit. I don’t give up quickly, but I also don’t run to beis din. Some things are more important than money.”

 “I believe in the rule that in business there are no friends, and won’t allow thievery in the name of friendship. This rule prevents my circle of friends from “trying me” right from the start,” said Reb Shmuel Kreuzer.

Reb Meir, from “Meah Shearim Finances” in Bnei Brak tells this story:  A close friend, a well-known, prominent citizen, used his position to avoid paying back a large amount he owed for a bounced check. “After trying many times to get the money back, I pulled out my last weapon. I threatened a ‘pashkevill’ [Yiddish colloquial term for bad publicity] on his good name, and told him that if the money wasn’t returned by the next day his name would be mud. He trembled, and the next day the money was in my hand. I hadn’t really planned on publicizing the problem, but that was the last time he didn’t pay on time.” 

Another difficulty is competition. This comes from two places: the registered and the “off-the-books” money changers. “In the past money changers always made a good profit,” said Reb Meir. “Today this isn’t always true. In addition to the competition, the profit margin is decreasing. In the years when the number of foreign workers here was expanding, the money changers profited from the large amount of money transfers to the workers’ relatives abroad. In today’s market I only sell dollars. In most transactions the customer wants to buy dollars. The money changer buys shekels from a bank at a high price; that reduces his profit much more than in the past. Previously people preferred to go to their neighborhood money changer because they got a better rate than at the bank. Nowadays everyone gives about the same good rate of exchange. The customers profit from this and it makes it a difficult  business environment for the money changers. Customers go to the most convenient locale, or who they know personally. I personally know of two money changers in Bnei Brak that are about to close their doors as a result of the poor market.” 

The Money Changer and the Sting Yes, there are incidents of theft and deceit.” One day a serious-looking policeman entered the rooms of Reb Shmuel Deutsch on Rechov Yona, in Jerusalem. “We have information that you have counterfeit dollars,” the policeman announced in a sharp voice to the workers. “You are known as an honest office,” he added, trying to soften the blow, “but the police can’t ignore this information. For the sake of investigation, I must ask you to open your drawer for an examination of twenty of the hundred-dollar bills in your possession.”

The bosses of the office smelled a rat. At this stage they exchanged roles. “In the name of the law, you must stay here,” informed Reb Shmuel to the shocked “officer,” as he locked the front door. He then called the police department to check if they had indeed sent an officer to the premises. The police knew nothing about it, and a squad car was speedily dispatched to the office. The counterfeit officer was escorted to jail. Only an outsider could think that the work of money changers consists of merely technical counting and transferring of denominations. One needs intuition as well, and if you don’t know this, you’ve probably only been on the customers’ side of the desk.

Most swindlers aren’t disguised as policemen, but as chareidim. They acquire the uniform and set out. Or they’ll enlist some gullible person as point man, who is unaware that he is now a full accomplice to the crime.

Almost every money changer, and not just those interviewed here, have fallen victim to the following ruse: During regular working hours, a customer comes and requests to exchange $2,000 in crisp new bills. The dealer carefully examines each bill to make sure there aren’t any problem ones. After he finishes counting it all out once, and usually twice, he puts the dollars on the counter, and pulls out his wad of shekels for an equivalent amount. The customer slowly counts out the shekel amount and angrily exclaims, “That’s all I’m going to get? Forget the whole transaction!” As if slighted, he slips his dollars back into his right pocket. The disappointed money changer, seeing all his imagined profit disappearing, tries to convince the customer to make the exchange. They reach a compromise. The customer pulls the dollars back out of his pocket, and the tired money changer looks at the familiar packet. The customer tries to give the impression that he is truly disappointed at this “loss” he is taking on the exchange. Only after the customer has disappeared, and sometimes not until the next day, is the stratagem discovered: the twin packet was only slightly similar to the first one, maybe only the first two and last two bills are real. The rest are counterfeit or simply one dollar bills. 

At one Bnei Brak changer’s office, a young soldier entered, and asked, “How many euros will I get for 3,000 shekels?” The money changer explained that he didn’t deal in euros. “No problem, so change it into dollars,” smiled the young soldier. As if the only difference in dollars and euros are the colors on the bills. This money changer, who was then inexperienced and naive, didn’t suspect a thing and gave him $670 according to the daily rate. “Excuse me,” said the soldier, right after he put the money in his wallet, “you only gave me $370. Here, look in my wallet.” The money changer became momentarily confused. He was certain he’d counted out $670, but maybe he’d made a mistake. The soldier held out his hand and asked for the other $300. The changer’s coworker was certain that the soldier had already received the full amount, and coolly informed him, “You have two choices. Either we lock the door and carefully check all of your pockets for the other $300 or you leave immediately.” The soldier quickly backed down and left. 

Two-Way Street Almost every chareidi money changer, probably also those outside these parameters, has run into the problem of cashing American checks for US citizens. Astute thieves know which neighborhoods, and which mailboxes receive checks. The checks may be printed out with impressive amounts, but you can’t use them at the local grocery. So the thief needs the services of a money changer. The check will be cancelled as soon as its theft is discovered. But by then the thief may have cashed it — and is laughing all the way to the bank. This “uncovered” check stays in the money changers’ hands. Reb Shmuel Kreuzer never accepts American checks, because of the widespread fraud. 

A money changer in the Ramot neighborhood was approached by a man who asked him to change a large amount of dollars to shekels. After the time-consuming transaction was completed, the customer asked if he could receive a check instead of the shekels in cash. The money changer, used to the opposite transaction, was happy to oblige, and wrote out a check. The next day, the customer returned and said that the check, for some minor technical reason, couldn’t be used. Could the money changer please write him a new check? No problem, the money changer got back the first check and replaced it. Only a few days later was it discovered that the check that had been returned was only an elaborate copy, and the original check, and the second check as well, had both been cashed. The money changer had paid out a large amount twice. There are even more “clever” stories. One Bnei Brak money changer does business with a particular client that is used to coming himself or sending a messenger to exchange dollars. To prevent problems, they agree ahead of time on a password to identify the messengers. One day the money changer noticed that the client had a bandage on his nose. The next day a new messenger came with the agreed-upon password. To verify the password, the money changer called the client, as he was told to do by the messenger. 

The client’s voice sounded strange, but he said he’d had a nose operation, “As you saw yesterday I have a bandage on my nose.” The money changer was reassured, and cashed the four-digit check. A few days later when the check returned, he discovered the messenger was a phony who had done his homework well. He’d learned the password and used the bandage as the perfect alibi to play the part convincingly. His partner answered the phone and played the part of the regular client. And the bandage? “Oh, that was just to cover a small pimple,” the client explained privately. Reb Meir, from Meah Shearim Finances warns about a transaction that went the other way. “Don’t ever do business with a money changer you aren’t familiar with or don’t trust,” he advises. On Chol HaMoed, when Meah Shearim Finances is closed, a money changer no one knew came to change money, saying, “Trust me, I’m a friend of Amir’s.” They trusted him and when they got home discovered that their thousand dollars had been traded for a genuine hundred-dollar bill and nine counterfeit bills. As the number of complaints grew, the true businessmen hung a notice, warning residents not to change money with anyone unfamiliar. 

The new man wasn’t deterred. He stood next to the sign and continued to change dollars and shekels for all who asked. One of the customers later recalled that because of the notice, he counted his money not once, but five times, and only afterwards agreed to the exchange. Before he gave over the money, the new money changer hesitated, saying that perhaps he had given over an extra hundred dollars, and began the count again. With a deftness of hand that could only be the mark of a professional, he switched the package of “kosher” dollars for another one of single dollars or counterfeit bills.

The Million-Dollar Question Sting operations are not only carried out at the counter. Reb Shmuel Kreuzer tells of professional colleagues swindled by Arabs. “In one incident the robber was known from the start. The money changer called the police, and reported that two Arabs were following him and parking their car near his home on a regular basis. The police were not able to prevent them from being around his home, and one day they threatened him. With the proverbial choice of “Your money or your life,” he chose life, suffering only a minor injury. Stories of robberies and treachery are common to money changers, who learn early on to protect themselves from theft. One of the first tips is to work with a regular client base. 

Those who work from home don’t open their door without looking through the peephole, and don’t open to people they don’t recognize. The money changers who work out of storefronts can’t avoid opening their doors to unfamiliar faces, but they can scrutinize. They are accustomed to do this, to protect themselves. “We remind those who are insulted by the questioning that one must undergo similar procedures at the airport,” answers Reb Shmuel Deutsch. It doesn’t always help, but the principle “better a bird in the hand, than two in the bush,” still holds true. Even with the preliminary questioning, there can be losses, especially with checks. “I am always torn by the dilemma of whether or not to cash a check” says Reb Meir. Reb Shmuel Deutsch, one of the old-time black marketeers, is quoted as saying that there is no competition for business that didn’t succeed. 

Reb Shmuel reports that he tries to protect himself by requesting a photocopy of the client’s ID. More than once, the customer has suddenly developed an urgent need to leave the store following this request, explaining that he needs to answer a phone call or something along similar lines. This reemphasizes the importance of valid identification. In Reb Kreuzer’s office, there is also constant video surveillance.

“The question every home-based money changer must ask himself is why a non-neighborhood resident would travel clear across town, and climb five floors without an elevator to change money? He could have gone to a store in the center of town much more easily,” emphasized Kreuzer. “Similarly, a chareidi money changer in a store must question why a person who is not chareidi would travel across town to change money. The simple answer has to be: because he hopes that at this particular location it will be easier to cheat.”

In the Days of the “Tables” “Jewish money changers evidently existed already in the days of the first Beis HaMikdash,” says Reb Yisrael Galas, a walking history encyclopedia of Israel and Jerusalem. “The Gemara recognizes money changers as “table-workers,” who were particularly busy during the Three Festivals, when people came up to Jerusalem from throughout Eretz Yisrael and Bavel. Each town had its own currency, and everyone who came up to Jerusalem had to exchange their coins for local currency. The money changers sat on the south side of Har HaBayis with all sorts of coins ready for exchange. Pieces of these tables have been found during excavations.

During Turkish rule, money changers were found at Damascus Gate, changing dinars to English pounds. 

Tips for the Beginner You’re still interested in the business? Welcome aboard, and here are a few tips from those experienced in the field. 

Check out the location It makes sense that if two traders are on the same street, then this is a location that people frequent to change money. If so, then maybe customers are also used to their regular changers. Even if not, the competition will cut into the profit margin of both the old and new money changers alike. Tip from the pros: find a new location where there isn’t an abundance of money changers. 

Ready cash. The professional money changer must always have a steady supply of ready cash available. Without this, don’t even think about beginning.

Beware! No money changer we interviewed knew of a place to learn the trade. So the school of hard knocks shouldn’t cost you too much during your training, the professionals advise you to find an experienced changer to sit next to you and teach you to recognize kosher and counterfeit bills, and show you some of the tricks that “customers” may try to play. 

Margin of Error The risk in professional money changing can be a large or a small amount of money, for an undetermined amount of time, due to a check that bounced, or other scams. Your monthly profits must balance out these expected losses. ￿

 

 


Originally published in Mishpacha Jewish Family Weekly Issue 146 February 14, 2007 http://www.mishpacha.com

 

 
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