Bank Leumi's UK CEO arrested for alleged embezzlement
Menachem Friedman is suspected of allegedly approving millions on loans based on falsified paperwork. Irregularities spotted during routine internal audit. 'Incident an isolated one,' says bank
Large-scale fraud suspected in Bank Leumi: The Tel Aviv police carried out a series of arrests Tuesday, detaining the CEO of Leumi UK Menachem Friedman, along with 13 other senior businessmen.
Friedman is suspected of making loans of up to NIS 25 million (approx. 7.3 million) to several businessmen, knowing they were based on fraudulent documents. The police are investigation whether he had received illicit favors in return for those loans, some which have not been repaid.
Investigators are also looking into the possibility that Friedman transferred funds to criminal elements.
Bank Leumi recently received a claim from its internal audit department on the matter. According to the information found, Friedman approved credit loans based on false and fictitious paperwork, while serving as manager Bank Leumi’s main branch in Tel Aviv.
The internal audit’s findings show that Friedman's actions were contrary to the bank’s regulations, and the borrowers who were arrested had stopped paying their loans at some point and have remained indebted to the bank.
Friedman returned from London a few days ago and was arrested along with the borrowers. Among the suspects are a former aviation industry senior, a restaurant franchise owner and even a former football player of a prominent league.
Another furniture business owner who allegedly brokered between Friedman and the businessmen in question, is still abroad. The police stand to investigate each businessmen’s part in the case and decide who to release and who to remand to custody.
Bank Leumi was quick to respond, stressing that the irregularities were discovered during a routine internal audit. "The audit indicates that this is an isolated incident that has no repercussions on the bank's customers. To the best of the bank's knowledge, the incident will cause no material losses to the bank."
Bank Leumi added that the findings were adequately reproted to the Bank of Israel’s banking inspector.
Friedman himself was placed on a leave of absence and the board of directors at Bank of Israel suggested the board of directors at Bank Leumi UK appoint Mrs. Lesley Skreten and Mr. Colin Cumberland, who serve as deputies to the CEO, as acting CEOs of the bank.
It was further emphasized that “the affair has no conenction to Leumi Bank UK or its customers.”
