Crime boss Yitzhak Abergil and four senior executives of an unnamed, publicly traded real estate company were arrested on suspicion of money laundering as much as 60 million shekels ($17.4 million).
The Rishon Letzion Magistrate’s Court remanded the five men for further investigation on Tuesday, but most of the details of the case are still under a court-imposed gag order.
The suspects include two of the owners of one of Israel’s largest construction firms, who are suspected of laundering the money on behalf of Abergil’s crime family. Abergil is currently in prison for his involvement in the murder of an Israeli drug dealer in the United States, as well as other crimes.
It is believed to be the first time evidence has been found of a crime family using a publicly traded company to launder its funds.
The Israel Tax Authority opened an investigation in 2011 into irregularities in one of the real estate firm’s projects in Eilat, but no indictments were filed. A few months ago, in light of intelligence information the police’s international crime unit received, the case was reopened and the police discovered a connection between the company’s management and Abergil’s criminal organization.
The suspicion is the company reported losses on the project in Eilat and used the subcontractors who built the project to funnel the funds to Abergil’s organization.
The international crimes unit established a special investigation team for the case because of the sensitivity of the matter.
The police say they have evidence that points to direct connections between the company’s management and the Abergil organization at the highest levels — which continued even when Abergil was in prison, both in Israel and in the United States.
The investigative team also includes the Tax Authority, the Israel Money Laundering and Terror Financing Prohibition Authority, and senior prosecutors.
Ruth David, the lawyer representing the real estate developer and its controlling shareholders, told the court the charges were untrue, asserting that it would have been impossible to hide such large sums.
“The [alleged] profits would have amounted to 3 million to 4 million shekels a year, so to say they hid such amounts is impossible,” she told the court.
Attorneys representing two of the individuals in the case also asserted that the allegations were baseless. “The great damage being caused to the company and its principals will be on the head of those who have conjured up a dark conspiracy based entirely on speculation,” one said. “Everything will be clarified, but we hope that that happens before it’s too late and the company has ceased to exist.”
But Judge Menahem Mizrahi ruled there was reasonable suspicion that the suspects had committed the crimes and extended their remand. He also expressed concern that they might seek to obstruct the investigation if they were released.
Abergil was returned to Israel in January after serving three years in prison in the United States. In accordance with his request and with Israeli law, Abergil is now serving the remaining three years of his sentence in Israel.
Abergil was arrested in Israel in August 2008, together with his brother Meir, following an extradition request from authorities in the United States, where the men were wanted in connection with the murder of Israeli drug dealer Sami Atias and other crimes.
In January 2012 the brothers were extradited to the United States, where each eventually reached separate plea bargains. Yitzhak was sentenced to eight and a half years in prison after being convicted of involvement in the Atias murder, of drug dealing, money laundering and blackmail. Meir was sentenced to three and a half years on top of time served (three years) in Israel and the United States.
Last July, Britain’s Guardian newspaper listed the Abergil family as one of the world’s five most powerful drug cartels. “The imprisonment last year of brothers Itzhak and Meir Abergil has done little to curtail the activities of the huge organization they led,” the newspaper said at the time. “The Abergils have been one of the world’s largest exporters of ecstasy, into the U.S. and elsewhere, and prolific in gambling and embezzlement too.”