Defense Ministry cuts ties to firm accused of fraud, as more detained

The Defense Ministry on Thursday announced it was freezing all contact with a company suspected of defrauding the government of “huge sums” of money by being paid to do work that it never completed, as police detained two more suspects in the case.

In total, police have brought in 14 people for questioning in connection with the case, four of them career soldiers.

On Monday, the first 12 suspects, including two IDF officers, were detained — but not placed under arrest — by police. The two others were arrested Wednesday.

The 10 civilian suspects were employees of a company responsible for maintenance on army bases. They are believed to have embezzled “huge sums” of public funds by “taking payment for work that was never carried out.”

The IDF officers — a lieutenant colonel and a major — are suspected of willfully ignoring the theft and becoming “partners” to the crime, police said.

Officials did not specify how much money they believed was collected in this way, but said it amounted to “huge sums.”

On Wednesday, the police brought in two more career soldiers, another officer and a non-commissioned officer, on suspicion that they too were involved in the ploy.

On Thursday, the Defense Ministry made its announcement about cutting ties with the suspected company until the investigation turns up more information.

A committee led by the ministry’s director-general, Brig. Gen. (res.) Roni Moreno, decided to “freeze all new contact with the company, suspend new tenders, and stop all money transfers to the company,” according to a ministry statement.

“In accordance with developments in the investigation, the committee will return and meet in order to determine the status of the company as a vendor and its relationship with the Defense Ministry,” the statement said.

The ministry said this was common practice in cases where there is “any question whatsoever” of criminal wrongdoing by employees, managers or owners of recognized vendors.

The name of the company and the suspects have been placed under a court-issued gag order and cannot be published.

Four of the suspects detained on Monday have been released. One was put under house arrest. The other seven remained in police custody.

Some of them are due to be released on Thursday, so police said they will return to Rishon Lezion Magistrate’s Court in order to extend the remand.

At the hearing, police will also ask the court to keep the suspects detained on Wednesday in custody.

Yet a police spokesperson said that it was “too early to talk about an indictment.”

The undercover investigation conducted by the Israel Police’s Lahav 433 anti-fraud unit took more than a year before necessary evidence was collected in order to bring in the suspects, police said.

According to investigators, the suspects have repeatedly, and over the course of several years, demanded payment for work that was never carried out.

The suspects’ offices were also searched on Monday, with police seizing computers and documents.