Singer Margalit Tzanani, who was arrested on Tuesday morning on suspicion of extortion, denied the allegations suggesting she blackmailed talent manager Assaf Atedgi.
Tzanani confirmed that the two hired an arbitrator to settle a financial disagreement over over royalties, but stressed that it was Atedgi's initiative, and was mutually agreed upon.
"I didn't hire criminals. I'm not familiar with the underworld," she told investigators.
Tzanani's attorney, Shahar Hetzroni, dismissed the allegations against his client: "These things never happened. She never turned to anyone about any debt, let alone any criminal elements. She's thunderstruck by this."
Tzanani's main concern, he added, "is to see this over and done with as soon as possible."
Earlier on Tuesday, police raided the home of the famous singer and television personality, and arrested her on charges of blackmail and threats.
Tuesday's raid was one of a series of raids by the police's Financial Fraud Unit into the homes of well-known criminals in central Israel.
Tzanani, also known as Margol, is a veteran Israeli celebrity and a judge on 'A Star is Born', the local version of American Idol.
Tzanani with 17-year old singer Omer Adam (Photo: Aloni Mor)
Officers suspect Tzanani hired underworld figures to assist her in a quarrel that broke out between herself and talent agent Assaf Atedgi, whom she believes owes her royalties from songs performed by a young singer they mutually represent, Omer Adam.
Detectives tracking several suspected members of a crime organization headed by reputed underworld figure Amir Mulner, who was arrested last month, discovered a connection to Tzanani, the police said.
The evidence leading to her arrest was obtained after investigators tapped her phone calls and had her under surveillance. The investigation was made public only with Tzanani's arrest, which coincided with the arrest of four other suspects as well, one of whom is her son.
The 57-year old singer was taken in for questioning by officers of the Financial Fraud Unit, based in Lod. All suspects arrested in the raids are scheduled to be taken before the court later for the remand of their arrests.
Tzanani will be arraigned before the Rishon LeZion Magistrate's Court on Wednesday. The Financial Fraud Unit is expected to ask the court to remand the singer, as well as the four other suspects arrested in the case, for an additional week.