National Fraud Squad detectives opened a new line of questioning Wednesday as they began to probe the inner workings of committees convened to make senior appointments within the embattled Israel Tax Authority.
Detectives questioned potential witnesses throughout the day, as well as continuing the interrogation of lead suspects in the case that they began 10 days ago. Sources close to the investigation said that police also questioned small business owners in connection with suspicions of bribes in exchange for tax reductions.
Meanwhile, the revolving door of the Tel Aviv Magistrate's Court continued to operate Wednesday, as two lead suspects appeared for remand hearings, but with different results. Businessman Kobi Ben- Gur, who has spent over a week in prison, was released to 30 days of house arrest, and barred from entering ITA offices for the next six months.
Fellow lead suspect Yoram Karashi, brother of Prime Minister Ehud Olmert's secretary Shula Zaken, was returned to prison with the end of his remand extension, after the court granted an additional extension that will end Friday.
Karshi was expected to be released to 15 days of house arrest on Friday, after which he would be barred from entering the ITA offices for another 30 days.
Investigators have refrained from commenting on details of the investigation into allegations that ITA appointments were influenced by powerful businessmen, including Ben-Gur, and that Karshi served as an intermediary. Police suspect that after those ITA officials were appointed, the businessmen would approach them to gain preferential treatment in tax assessments.
One day earlier, the remand of the ITA's representative to the United States, Yigal Sa'ar, was extended by four days, also by the Tel Aviv Magistrate's Court. Sa'ar, who was arrested following his unwilling return to Israel on Monday, held his plum position at the Israeli Embassy for a mere two months prior to his recall.
Sa'ar was appointed to his position by ITA chief Jacky Matza, who is also a suspect in the case and is currently under house arrest.