19 arrested in 200 million-shekel swindle
Israel Tax Authority believes the suspects carried out fraud and money laundering of about NIS 200 million; the money was laundered through check clearing companies which have been forced to stop trading.
Nineteen people were arrested Monday on suspicion of fraud and money laundering of about NIS 200 million in state funds, according to an investigation by Israel Police's financial unit and the Israel Tax Authority.
One of the major suspects was a businessman who lives in a luxury villa in Savyon, and who drives a car valued at about NIS 2m, while a second major suspect was businessman Adi Zim, 46, who at the age of 15 opened a grocery store and became a multi-millionaire.
Among the allegations against all the suspects are tax fraud, forgery, fraud and money laundering. The investigation revealed that several employment agencies in various fields such as security, nursing, cleaning and agriculture inflated the number of their employees, reported on the alleged salaries paid to fictitious employees, issued false invoices, and inflated various expenses on invoices. As a result, they received tax returns from the state and paid less taxes.
The employment agencies are suspected of having transferred approximately NIS 200 million earned by fraudulent means to check-clearing companies such as SR Accord- who laundered the money.
Most of the money was then transferred to employment agencies. It is suspected that the check-clearing companies cashed checks despite being aware of their fraudulent nature.
Investigators on Sunday raided the homes and offices of the suspects, confiscating documents and property, including a luxury BMW car.
The Israel Securities Authority stopped SR Accord's trading on the Tel Aviv Stock Exchange. As a result its share price plunged more than 40%. Sources close to the company said that this represented "an earthquake in the check-clearing market" .
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