Supermarket mogul Rami Levy, mayor arrested on corruption suspicions
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Supermarket mogul Rami Levy, mayor arrested on corruption suspicions

Months-long undercover investigation ends in tax fraud, bribery charges in Mevasseret Zion mall development project

Rami Levy at the construction site for his new mall in Atarot, Jerusalem, June 21, 2016. ( Luke tress/Times of Israel)
Rami Levy at the construction site for his new mall in Atarot, Jerusalem, June 21, 2016. ( Luke tress/Times of Israel)

Supermarket chain owner Rami Levy, Mevasseret Zion Mayor Yoram Shimon, and two of their associates were arrested on Sunday on suspicion of fraud and breach of trust surrounding the construction of a mall.

Police said the other two suspects are a businessman and the manager of a local newspaper. All were arrested early in the morning, and their homes and offices were searched by investigators with the Lahav 433 anti-corruption unit.

Officials said the owner of the eponymous supermarket chain is the main suspect in the investigation. Other details of the case remain under gag order.

Police said the arrests came after a months-long undercover investigation into Shimon’s handling of the construction of a local shopping mall.

The allegations apparently stem from NIS 20 million in taxes that Levy was mostly exempted from paying at one of his mall development projects.

According to reports, Levy had requested municipal approval for an additional 3,000 square meters of commercial space at the mall he was constructing. The permits were approved by the city council, with some NIS 20 million in property taxes waived by the council, reportedly at the behest of council head Shimon.

Shimon’s wife was later employed as the mall’s director of marketing, and a city council member was appointed the mall’s CEO.

Levy owns a chain of discount supermarkets bearing his name around the country, as well as a cellphone network, and has recently begun developing commercial real estate as well.

He has long been a well-respected entrepreneur, and was chosen to light a torch at the state’s main Independence Day ceremony in 2015, one of Israel’s highest civilian honors.

Levy has previously faced legal trouble. In 2016, police recommended he be indicted for illegal use of information about employees and competitors taken from his cellphone company.

According to reports in Hebrew-language media, Rami Levy on Sunday announced a trading halt on all company shares on the Tel Aviv Stock Exchange until further notice.

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