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Nochi Dankner likely to be indicted for securities fraud
By YONAH JEREMY BOB
06/01/2014
Final decision to indict Dankner taken by top officials at State Prosecutor's Office, at recommendation of Tel Aviv District Prosecutor.
 
If business magnate Nochi Dankner thought that nothing could get any worse after losing control of IDB on Sunday, the prosecution’s announcement Monday that it would likely indict him for securities fraud relating to hundreds of millions of shekels may have been a rude awakening.

The Tel Aviv Economic Crimes department said that it would likely file an indictment, but would first offer Dankner a special pre-indictment hearing where he could try to convince it to close the case.

Such hearings very rarely prevent an indictment. But in 2012, such a pre-indictment hearing allowed Foreign Minister Avigdor Liberman to successfully convince Attorney- General Yehuda Weinstein not to indict him in a large, multi-million dollar money-laundering case.

Instead, he was indicted in the much smaller Belarus Ambassador Affair, for which he was acquitted.

The prosecution’s statement read that Tel Aviv District Attorney Liat Ben-Ari (who also leads the Holyland trial prosecution) made the decision in coordination with the deputy state attorneys for criminal and economic affairs.

If the case goes forward, Dankner will be indicted for securities fraud, misrepresentations to shareholders and investors, failure to issue certain reports and illegal use of assets under money-laundering laws.

The indictment would address alleged crimes committed in February 2012 regarding an over NIS 300 million fraud in conjunction with the issuing of shares by IDB.

According to media reports, Dankner, broker Itai Strom and other allies coordinated an artificial scheme in which they manipulated IDB stocks prior to a major issuing of shares and took other actions in a manner that artificially inflated the price of the shares and the success of the offering.

There was rampant media speculation about Adi Sheleg, who has also been suspected of involvement in the securities fraud scheme.

Speculation focused on the absence of Sheleg from the list of potential defendants, with many saying that Sheleg may have cut a deal for preferential treatment or immunity in exchange for turning state’s witness against Dankner and other defendants.

The Justice Ministry would not officially confirm or deny Sheleg’s status.

In November 2012, Dankner was questioned under suspicion of having committed securities fraud. He was released from police custody only after depositing a NIS 5m. check for bail and after the court issued an order banning him from leaving the country, having viewed him as a potential flight risk.

The prosecution’s statement said that the prosecution was also weighing indicting Strom and IDB itself for securities fraud and other overlapping crimes with Dankner.

Attorney Eli Zohar, representing Dankner, responded, “We completely deny all of the claims by the prosecution, which were mentioned in their statement today, and we believe that following the hearing, it will be decided that there is no basis to move forward with a trial.”

Zohar added that the timing of the prosecution’s statement “was astonishing,” it being the day after control of IDB was permanently wrested from Dankner in favor of Eduardo Elsztain and Moti Ben-Moshe.
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