Disgraced real estate magnate Boaz Yona suspected of defrauding creditors

Boaz Yona, the former CEO of the Heftsiba construction company, was arrested on suspicion of defrauding creditors, money laundering and other offenses, after accruing a debt of NIS 1.8 billion ($583 million), police said Wednesday morning.

Police suspect that Yona hid income and assets from creditors by transferring accounts and assets to other people. He was targeted in an undercover operation, during which investigators raided his homes and offices.

Yona was sentenced to seven years in prison in 2008 for his role in the collapse of the Heftsiba real estate empire, in which executives embezzled NIS 118 million ($38 million) from the company when the firm eventually went bankrupt in 2007.

The Heftsiba scandal left thousands of families without homes and sent shock waves throughout the real estate world. Yona went on the lam, but was arrested in Italy after an extensive international effort, and brought back to Israel to face charges.

He was released early in 2012 as part of an effort to prevent prison overcrowding, and the multi-million-shekel fine he was originally ordered to pay was halved.

The company, later known as Heftsiba Construction, Development and Investments Ltd., was established in 1968 by Yona’s father, Mordechai.