At Friday night dinner, almost two weeks after the collapse of Heftsiba Construction, Development and Investments Ltd., I did what I tend to do when news items on my beat involve non-police-related concepts beyond my scope of knowledge: I asked an expert. Turning to the recent graduate in economics and longtime bank employee sitting to my right, I requested an explanation of the Heftsiba affair. How, I asked, had banks, buyers and even (according to their clams, at least) underworld loan sharks been taken in by CEO Boaz Yona? The young economist, who finished her degree as valedictorian of her class, sighed. "You know, everything that happens with these building companies and buyers is such a game. I'd rather just buy a second-hand house and not even deal with the question of financing. Mortgages are so complex here that no 'civilian' can actually wade through all the terminology." Although she didn't quite answer my question, her response could not have been more clear if she had planted a warning sign - complete with flashing neon lights - directly in my path: "Danger - complex bureaucracy ahead!" In considering the collapse of Heftsiba, I am reminded of a talk that Finance Ministry Accountant-General Eran Zaliha gave to the Movement for Quality Government at that watchdog organization's annual conference. Zaliha offered the shockingly simple thesis that massive bureaucracy tends to harm the innocent citizen and plays into the hands of con men, "machers" and others who operate with the intent of abusing the system. IN THE case of Heftsiba, the road seems to have run in two directions. On the one hand, families, in some cases struggling to make ends meet, were persuaded to participate in purchase plans that may have saved them money, but carried with them the hidden expense of removing all securities they had on the property. No legislation or oversight seems to have been able to save them from the alleged actions of Heftsiba, or - some would argue - from themselves. On the other hand, there was the troubled management of Heftsiba, which, if police suspicions hold true, engaged in a series of financial crimes that would make even the most corrupt politician blush. From money-laundering to embezzlement, fraud and theft, hardly a stone remains unturned in the long list of allegations against Yona, his corporate cronies and even his father, Mordechai, who founded the company in his wife's name. But strangely enough, even with laws on the books to prevent all such offenses, investigative divisions of the Israel Tax Authority and two top police units - the National Fraud Squad and the National Economic Crimes Unit - nevertheless, all of the illegal goings-on at Heftsiba seem to have managed to pass under everybody's radars. Case details beginning to emerge only serve to reinforce this point. This week, one probe indicated that Yona may have engaged in a money-laundering scheme so basic that it seems too simple to believe. According to suspicions, huge sums of money were transferred from Heftsiba accounts in Israel to Eastern European accounts, allegedly to purchase real estate in the growing markets there. But investigators believe that no such purchases were made, and the money was instead transferred to New York, where it sat in a JPMorgan Bank account in Yona's - not Heftsiba's - name. Finally, in at least one transaction, extremely large sums of money - approximately $1.95 million, in the case of one made on July 24 - were transferred by check from the New York account back to privately-held accounts in Jerusalem. What should have set off especially loud warning bells was the fact that the Jerusalem account was listed in two names - Boaz Yona and Shlomo Narkis. For those unfamiliar with the world of local loan sharking, Shlomo "Shuly" Narkis was once considered by police to be the country's number one "grey market" loan guru. He was also recently released from prison. His name, then, on a joint bank account with the owner of a major company should have raised eyebrows in at least one of the government institutions tasked with tracking down white-collar crime. Apparently, it didn't. Nor did the Israel Money Laundering Authority - which exists for the sole purpose of uncovering schemes of the type now being investigated - seem to take notice. This goes beyond human error. All Israeli major banks use computer programs aimed at detecting dubious transactions which might indicate money laundering. In fact, Israeli companies are responsible for designing some of the computer programs used worldwide to trace and identify suspicious money trails. Yet it was only a week after the company's collapse - and days after banks received search warrants to confiscate vital documents connected to the Heftsiba case - that any of the law enforcement agencies and government organizations targeting white-collar crime opened an investigation into the dealings of Yona and his associates. It was only then, after the entanglements of bureaucracy and uncertainty gave any guilty parties ample time in which to destroy paper trails, did the white-collar crime experts begin to move in. They were too late to keep the company from collapsing under the weight of the alleged illegal dealings. More importantly, they were too late to keep hundreds of people from possibly losing their hard-earned property investments. They were also too late to catch up with Yona - possibly the only person in the country with advance warning of what was about to happen - who fled overseas 30 hours before the collapse, leaving banks and buyers alike stymied and with empty pockets. Police are now questioning Mordechai Yona and former and present Heftsiba executives who have been remanded to house arrest. An arrest warrant was also issued for the absconded Boaz Yona.