(photo credit: Ariel Jerozolimski [file])
The police and the Tax Authority have cracked what they say is a multi-million shekel illegal gambling network run by the family of Likud MK Inbal Gavrieli.
Police revealed on Monday that last month, following a two-year joint investigation, they arrested 11 people on suspicion of money laundering and tax evasion, as well as operating illegal Internet casinos.
The suspects included Shlomi and Shoni Gavrieli, the father and brother of Inbal Gavrieli, and her uncle, Reuven Gavrieli. Others detained were Meir Abergil, the brother of suspected crime family head Itzik Abergil, and Yoram Tsarfati, the son of 1970s kingpin Mordechai "the Mensch" Tsarfati.
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When the authorities came to search the Gavrieli house, the MK used her parliamentary immunity to stop them, saying that she also lived there.
The Tax Authority will need to appoint a new person to the lead the investigation after Yom Tov Zohar, who had headed the probe, died of a heart attack on Monday. Although this was the same day that the investigation was publicized, no foul play is suspected, a Tax Authority spokeswoman said.
Supt. Gov Ya'akov of the Tel Aviv police said the suspects ran their gambling business via a chain of outlets called Internet Caf , which are located across the country.
"There were a number of caf s with computers. People would come, pay money to receive points and they would gamble. If they won, they received the money at the caf and if they lost, they lost all their money," he said.
During the two-year probe, investigators uncovered evidence of money laundering and income tax and value added tax transgressions worth tens of millions of shekels, with the suspects hiding the money they made from the gambling.
However, the network could only be a very small part of the industry. In a recent interview, Tourism Minister Avraham Hirchson said he believed the illegal gambling sector was worth between NIS 11 billion and NIS 12 billion a year.
"This is a large amount... and is in fact the biggest financial source of strength for organized crime," he said.
Tel Aviv Magistrate's Court had originally extended the remands of the 11 suspects on January 23, while investigators conducted searches at the businesses and homes of the detainees, confiscating computer equipment and thousands of documents.
However, Tel Aviv District Court released some of the suspects on Monday, with the judge explaining that the investigation could continue even if they were free, said Ronen Rosenbloom, one of two lawyers representing Reuven Gavrieli and Yoram Tsarfati. These suspects are under house arrest for seven days, but argue that they have done nothing wrong.
"They say that they set up an Internet gambling network, but not in a way that breaks Israeli law," said Rosenbloom, who is working in partnership with Haim Mizrahi.
"The servers [for operating the Web sites] are spread out in many places in the world where it is permitted, but not in Israel," he said.
However, the police believe there are servers in Israel (in addition to those overseas), thereby rendering the operation illegal.
Gavrieli and Tsarfati also deny the money laundering and tax evasion charges, saying that the business lost money, thus precluding them from paying taxes.
Inbal Gavrieli's spokesman wouldn't comment on the arrest of the members of her family, other than to send a statement explaining why she refused to let the police search her house.
"The law in Israel gives immunity to every MK from a search of the home in which they live. I told this to the investigators who asked to search my home, and they rightly decided to honor my immunity and uphold the law," Gavrieli said.
To be able to search the building, police have asked Attorney-General Menahem Mazuz for authorization to bypass Gavrieli's immunity.
The investigation developed from the "Belarus hit squad
" case in March 2004, when police said they had discovered that assassins were hired as part of a battle for control of the illegal gambling market in the center of the country. Police arrested four people from Belarus who they believed tried to kill Shoni Gavrieli due to his alleged business contacts with underworld figures.
Although gambling is illegal in this country, Israeli-owned companies operating abroad are among the leaders of the on-line gaming industry. In September, 888, which was founded by Aharon and Avi Shaked and Shay Ben-Yitzhak, raised 147.7 million from an initial public offering on the London Stock Exchange. In July, Empire Online, a provider of marketing services to the on-line gaming industry, raised $222 million in a London IPO. The company's chief executive and largest shareholder is Noam Lanir.
Gil Hoffman and Avi Krawitz contributed to this report.
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