Ambassador to Great Britain Zvi Hefetz was questioned under warning last Friday by investigators from the policeâ€™s International and Serious Crimes Unit regarding suspicions that he was involved in a massive Bank Hapoalim money laundering scheme, it was released for publication on Monday.
In March, police froze $372 million deposited in Bank Hapoalimâ€™s branch 535 on Rehov Hayarkon in Tel Aviv. Police suspected that the money, which belonged to 200 of the bankâ€™s international clients, was obtained illegally and had been knowingly laundered by bank employees.
Police decided to question Hefetz due to his close ties with Russian businessman and Maâ€™ariv newspaper shareholder Vladimir Gusinsky, who had been named as a suspect in the case. Police suspect that Hefetz, who served as Gusinskyâ€™s representative in Israel before taking up the diplomatic post in the UK, was aware of and even possibly behind suspicious money transfers made into the Russian businessmanâ€™s accounts at the branch. Police said they were confident indictments would be filed against some of the bank account owners and possibly even against Gusinsky.
â€œThe investigation is at a very advanced stage,â€ one officer said. â€œWe are confident indictments will be filed, but that is ultimately up to the prosecution.â€ In March, following a year-long investigation, police detained 22 employees from the branch suspected of crafting and implementing two methods used by local and foreign businessmen to launder illegally-obtained funds.
Using the â€œback-to-backâ€ method, police said, businessmen would transfer large amounts of money into accounts belonging to straw companies they fictitiously owned and would then transfer the money back abroad several minutes later, after it was cleaned of its illegal origins. In some cases, police said, the bank would grant the businessmen loans matching the amount of money deposited in the Hapoalim account and the businessmen would then transfer the â€œcleanâ€ loan overseas while the â€œdirtyâ€ money was swallowed up by the bank.
The Foreign Ministry distanced itself from the investigation on Monday claiming it had no affect on Hefetzâ€™s work as the senior Israeli envoy in the UK.
â€œThis is an investigation that has nothing to do with his activity as ambassador in London and as such we have no comment,â€ Foreign Ministry Spokesman Mark Regev said.
Last month, a first indictment in the affair was filed in the Tel Aviv District Court against a group of Russian businessman who allegedly transferred assets valued at $7 million to Israel. The monies were reportedly transferred to Bank Hapoalim by other accounts belonging to a straw company owned by the businessman to avoid being taxed.
Hefetzâ€™s diplomatic career has not been smooth. Even before taking up his current post, Jewish leaders in Britain slammed his appointment lamenting his blatant lack of English skills. Most recently Hefetz came under the spotlight after his daughter was arrested in Peru for allegedly attempting to smuggle drugs outside of the country. She was later released by a special presidential pardon.
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