Illustration
Photo: Oren Aharoni
29 people suspected of billion shekel fraud arrested
Concluding year-long investigation, police arrests 29 people—3 of them in Spain—on suspicion of defrauding state of NIS 1 billion by issuing fictitious invoices for construction work that was never carried out; suspects included person with prior record, bank employee.
Twenty nine people were arrested Tuesday as part of a covert investigation conducted by the police's National Unit for Combating Economic Crime (NUCEC), which has now gone public. The investigation had been ongoing for the past year as part of NUCEC's collaboration with the Israel Tax Authority, the Tel Aviv District Attorney's Office and the Money Laundering Prohibition Authority.
The suspects' arrests marked the first time members of an economic crime outfit were apprehended. Their organization worked in a methodical, orderly manner, similarly to other organized crime groups, to defraud the state, regulators and tax authorities.
The breadth of their fraud was estimated to be a billion shekels—starting 2015 and lasting until just recently. Hundreds of investigators and detectives, accompanied by Justice Ministry officials, worked on the case.
The NUCEC's investigation went public, leading to the arrest of 29 people (Photo: Avi Moalem)
The organization's operations centered on issuing fictitious invoices, with the group's members divvying responsibilities by using different companies—some of them "trumping up" invoices without performing any work, making the members eligible for the 17 percent Value Added Tax rebate.
The funds were then laundered using money changers. The companies involved operated in the construction and foreign employee importing sectors.
The organization was comprised of several levels, with executive operations taking place in Spain and headed by a person with a prior criminal record, who will be extradited to Israel. A bank employee was also arrested.
The year-long covert investigation concluded both in Israel and abroad Tuesday, involving sums hitherto unheard of in money laundering. In the past, members of criminal organizations were indicted for extortion, bribery and gambling. In the aforementioned case, however, the members were money launderers specializing in fictitious invoices.
Attorney Shai Roda said police were harassing his client simply due to her choice of life partner
Attorney Shai Roda, representing one of the suspects, said, "My client says she has nothing to do with the criminal organization. This is not the first time NUCEC has picked on her simply because of her choice of life partner. My client is cooperating with investigators and I believe she will be released home soon."
Attorney Ofer Almog, who represents two of the suspects in the case, said, "This is a far-reaching affair. We're only at the investigation's beginning, and I'm certain that as it progresses, my client will be found to have acted impeccably while meticulously adhering to the law when managing his money changing business."
