Israel likely to probe alleged money-laundering network

Law enforcement source to 'Post': No such request has yet been received by Israeli police, however.

By
July 26, 2009 23:46
1 minute read.
Israel likely to probe alleged money-laundering network

police car 248.88. (photo credit: Channel 10 )

 
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The Israel Police will likely receive a request from the FBI to assist in the investigation of an enormous money-laundering ring that allegedly involved Orthodox charities operating in the US and Israel, a law enforcement source told The Jerusalem Post on Sunday. The source stressed, however, that no such request had been received yet by Israeli authorities. According to the FBI, five US rabbis ran a money-laundering network that utilized charities based in Israel, New Jersey and New York. Earlier Sunday, former police Investigations Branch head Cmdr. (ret.) Moshe Mizrahi said that if Israeli charities were involved, it was a certainty that Israeli police would eventually need to investigate. "If the signatures lead to here, and the money passed through here, that would demand an investigation here," he said. "This would be a very local case of money-laundering as well, not just an American case," Mizrahi added. Mizrahi noted that there were two types of money-laundering, but that only one type of offense was recognized as money-laundering by Israeli law. In the first type of activity, money "from shady sources is laundered so that it can be used legitimately," he said. "The money is circulated through several people in the form of false donations and transferred through organizations to hide its origins," he explained. "Everyone takes a little on the way as the money makes the rounds. If you wish to launder $1 million, for example, you can get back $700,000, which can be used legally." The second form of offense is tax evasion, which is a "different kind of operation. The money is hidden as false donations, thereby evading scrutiny and tax in both countries," Mizrahi said. "Tax evasion is not recognized as money-laundering in Israel, although it is recognized as such in other countries," he added.

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