RAPAPORT... Five people were indicted last week in a long-running
scandal in which a firm at the Israel Diamond Exchange converted notes into cash
and mediated the sale
of more than $300 million in fictitious
invoices,
Globes reported.
The
bank, referred
to as the ‘clandestine bank’, turned checks and buying notes – papers
passing between diamond merchants – into cash at a 2.75 percent
commission charge and created false VAT invoices for transactions that never
took place, according to the report.
The
business provided check discounting services without a license and camouflaged as a
diamond trading business without reporting to the Israel Money Laundering Prohibition Authority
and without reporting the identity of customers as required, according to the verdict that convicted
one of the two founders, Menachem Magen, Globes reported.
It conducted more than $318 million in transactions between 2005 and 2011, Globes
quoted the conviction as saying.
The five
people charged
in the past week were Zion Betzalel, Meir Anavi, Yorai Borochov, and Miriam and
Gabriel Yosefov, Globes reported. They were customers of the bank and sometimes served as invoice
suppliers, according to the newspaper. Betzalel is accused of having received
false invoices from Magen and Elad and supplying false invoices, it continued.
The
scandal came to light three and a half years ago and led people to ask what
proportion of diamond trading in the Israeli bourse in Ramat Gan is conducted
without full disclosure.
The
trial of the clandestine bank’s second founder Doron Elad continues, according to Globes.
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