Throughout the course of the investigation, which had been ongoing for a number of months, several senior company officials were arrested in addition to former senior IDF officer Brig. Gen. (res.) Amal Asad.
Asad is believed to have received bribes from the company DruzNet, who allegedly transferred fund to him through his relatives so he would help them keep their IAI contract.
Asad has denied all accusations against him, which include bribery, breach of trust and money laundering.
Among those arrested are also senior board members and a bank manager.
One of the senior IAI board members is suspected for assisting another company in being contracted to work with the IAI. The aforementioned company has previously been said to be dangerously unqualified for the industry.
A police representative stated that the senior board member "worked in a criminal fashion to allow the contracting of a company as a supplier for the IAI. That same company worked in the industry while endangering public safety, by providing services it was not supposed to."
Responding to the question of what danger the senior member poses that warrants an arrest, the police representative said that "the suspect did everything in his power to allow the contracting of a company even though it was unqualified to work with the industry. If not for him, the danger the company posed by its activities as a supplier would not have existed."
Judge Amit Michaels then ruled that "after reading the case file I found the suspicion to be highly plausible. The case file holds dozens of documents against the suspect and his alleged endangering of public safety due to his ties with the aforementioned company."
The corruption investigation focused on suppliers providing bribes and kickbacks to company officials in order to win various tenders.
In one glaring example, an as-of-yet unidentified northern Israel company allegedly provided illicit favors in exchange for several IAI contracts. In direct contravention of regulations, the same company was also given clear preference over others in tenders.
According to information from police, the unnamed contracting company was awarded "rolling" orders, meaning, each time payment for a particular service was concluded, an additional service contract would be provided.
Another example includes fraudulent payment invoices being submitted by IAI officials for services that never occurred.
Investigators also believe that the contracting company was illicitly favored due to an association with one of IAI's directors, a senior IDF reserve officer, and his good connections with other IAI executives.
One of the suspects from the northern contracting company is a member of the Likud Central Committee and another is a Histadrut member.
"This is a complex and extensive investigation, which involves a number of different actors being suspected of a variety of offenses including bribery, aggravated fraud, money laundering, theft by a public servant and breach of trust," police said in a statement.
Police also added that the undercover investigation uncovered "systematic criminal conduct and deep suspected corruption that is apparently the norm in IAI.
"This case includes a large and diverse amount of people involved, including board members, executives, managers, junior staff; all those who were gatekeepers (to IAI), in addition to service providers and consultants for the company."
IAI have issued a statement in response to the affair: "Recently, several suspicions of unlawful conduct were checked by the Aerospace Industries.
Following instructions by the CEO and the directorate, the company acted to investigate these suspicions, showing zero tolerance towards any wrongdoing while investing considerable recourse and using many different means in an effort to eliminate these phenomena, which do not reflect our policies.
The resulting findings of these investigations were then handed to the appropriate law enforcement agencies."
The undercover investigation was handled by the Lahav 433 unit of the Israel Police and the Director of Security of the Defense Establishment ("Malmab"). It also involved investigators from the Israel Tax Authority and State Attorney.
As part of the investigation, police have executed search warrants on the homes and offices of the suspects.
(Translated and edited by Fred Goldberg and Lior Mor)