Diamond Exchange traders 'ran illegal bank'

'We penetrated a fortified center to get suspects,' law enforcement tells 'Post' following year-long undercover investigation.

By
January 8, 2012 16:52
1 minute read.
Ramat Gan's Diamond Exchange district

Diamond Exchange 311. (photo credit: Wikimedia Commons)

 
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A massive police investigation into a suspected illegal “shadow bank” based at the Ramat Gan Diamond Exchange resulted in the arrest of 16 suspects on Sunday.

The suspects illegally handled around a billion shekels while carrying out a range of undeclared banking activities, police said.

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The suspects, some of whom are traders at the Diamond Exchange, were arrested at their homes and businesses by dozens of police and Tax Authority officials, following a year-long undercover investigation.

“The suspects systematically laundered large sums of money... converted foreign currency and gave illegal loans,” police said. “They made major profits, and used their offices as an undeclared bank,” police added. They also suspected of transferring funds abroad and cashing checks.

A new police unit called the Task Force Against Professional Money Laundering played a major part in gaining access to the Diamond Exchange during the undercover investigation.

A senior law enforcement source described the Diamond Exchange as a “fortified” site due its stringent security arrangements for employees and visitors, making it difficult for police to secretly track the suspects. Undercover agents followed suspects for several months at the trading center, gathering evidence.



“The suspects’ activities were disguised as legitimate trading activities,” police said.

The investigation combined the expertise of several law enforcement bodies, including the police’s Lahav 433 Unit, the Tax Authority and Tel Aviv state prosecutors. Authorities hope to charge the suspects with money laundering, banking offenses and tax evasion.

The suspects will appear before the Rishon Lezion Magistrate’s Court on Monday morning.

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