Police arrest 29 accused of massive billion shekel fraud

Suspects allegedly issued fictitious receipts for construction work, and claimed back the VAT from the government

Illustrative image of a criminal in handcuffs. (YakobchukOlena/iStock, by Getty Images)
Illustrative image of a criminal in handcuffs. (YakobchukOlena/iStock, by Getty Images)

Police on Tuesday said they had arrested 29 people accused of swindling the state out of more than NIS 1 billion ($300 million).

The suspects, including a senior official at a major bank, are believed to have issued fictitious receipts in the construction industry.

Hebrew media reported that among the detainees were several people — including two heads of an unnamed crime family — who were arrested in Spain.

The arrests followed a year-long undercover operation by police and the tax authority. The fraud reportedly began in 2015.

Through front companies issuing inflated or fictitious receipts, the fraudsters were allegedly able to get rebates of the Value Added Tax from the government, according to reports. The money was allegedly laundered through money-changers.

Twenty of the detainees were brought before judges at Rishon Lezion Magistrate’s Court, and police have requested the Spanish court extend the remand of those arrested there and will attempt to extradite them to Israel.

Shai Rodeh, the lawyer for one of the suspects, claimed his client had no connection to any criminal ring. He told the Ynet news website that his client said she was being harassed because of her partner, and this was not the first time police had wrongfully arrested her.

Ofer Almog, a lawyer representing two other suspects, said his clients were cooperating with investigators and were confident they would be found innocent.

Police said that more arrests are expected. The suspects were not named.

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