Report: Police probing money laundering allegations against ex-PM Barak

Investigators said checking whether former leader failed to declare funds abroad, an offense warranting 10-year prison term; Barak’s office denies report in its entirety

Police’s National Fraud Unit and the Justice Ministry’s Money Laundering Prohibition Authority launched a preliminary investigation into allegations that former prime minister Ehud Barak was in possession of millions of dollars’ worth of undeclared funds abroad, an Israeli newspaper reported Tuesday. The offense could warrant a 10-year prison sentence.

Barak’s office denied the report.

Barak, who served as premier from 1999 to 2001 and later as defense minister, was approached by investigators regarding the allegations Monday, but so far has not been summoned for questioning by police, according to daily Haaretz.

Attorney General Yehuda Weinstein and Deputy Attorney Raz Nizri have been informed about the investigation, which is being conducted under the supervision of State Prosecutor Shai Nitzan, the paper reported.

The Money Laundering Law, which was passed by the Israeli government in 2000 — during Barak’s term as prime minister — determines that holding more than NIS 500,000 ($130,000) in undeclared funds outside the country is illegal, and that failing to alert authorities as to the existence of such foreign assets may result in a 10-year prison sentence or a fine.

After losing the general elections to Ariel Sharon in 2001, Barak left politics and went into business. In 2007, he returned to politics as head of the Labor party and later served as minister of defense. Barak retired from politics again in 2013 and has since served as a partner or consultant in several ventures. He currently is financially involved with Julius Baer, a private Swiss bank, as well as the strategic consulting firm Argo, among others.

Barak’s office vehemently denied the allegations leveled against him, and stated that the former prime minister had not even been approached by investigators.

“Neither police nor the Tax Authority turned to Barak on the matter,” a statement issued by Barak’s office read, according to Haaretz. “Barak legally holds one bank account abroad, at the Julius Baer bank where he serves as a consultant.”

“The account is reported as per the law, and taxes resulting from revenue [at the bank] are reported and paid legally and scrupulously. There is no doubt that the report will prove to be false because neither the police nor any other authority can invent a bank account where there is none.”