13 Suspects Arrested In Israel Aerospace Industries Corruption Scandal

Israel Police’s corruption unit arrested 13 people on Wednesday following a months-long undercover investigation into the Israel Aerospace Industries.

According to the Lahav 433 unit, the suspects include a former senior IDF official, IAI employees and employees of private companies that provided services to IAI.

“The undercover investigation of this affair has so far revealed systematic criminal conduct and suspected deep corruption, which is apparently common within the Israel Aerospace Industries,” Israel Police said in a statement. Police added that charges include aggravated fraud, money laundering, theft by public officials, fraud and breach of trust.

Police conducted searches of several suspects’ homes, private offices and IAI offices early Wednesday. They will be brought to the Rishon Letzion Magistrates Court later in Wednesday for a remand hearing.

Last month, the Movement for Quality Government appealed to the government to oppose the appointment of Yair Shamir as IAI chairman, citing his conflict of interests.

3 replies
  1. Joe Levin
    Joe Levin says:

    Police arrested 13 people, including a former high-ranking IDF officer, on Wednesday morning, following a months-long “deep corruption” probe into the Israeli Aerospace Industries, police said.

    They are suspected of a wide range of corruption charges, including fraud and money laundering.

    The suspects came from IAI and private companies who either supplied or were supplied by IAI, along with the aforementioned former senior Israel Defense Forces officer, who police said was “well known in the defense establishment.”

    A number of other people were “detained for investigation,” but not formally arrested, police said.

    IAI said it would cooperate with the probe.

    On Wednesday morning, police also raided the homes of the suspects, their companies and the offices of the Israeli Aerospace Industries.

    “This is an extensive investigation, with a wide scope, which includes a number of sub-scandals, and raises suspicions of a range of charges — corruption, aggravated fraud, money laundering, theft by public officials, illegal business practices, fraud and breach of trust,” police said in a statement.

    The “covert investigation” was conducted by the police’s Lahav 433 anti-corruption unit, along with investigators from the Tax Authority and the Director of Security of the Defense Establishment, an internal Defense Ministry investigatory unit.

    The financial crimes department of the State’s Attorney’s Office was also involved in the investigation, police said.

    “The covert investigation of this affair has thus far shown systemic criminal business practices and the suspicion of deep corruption, which is apparently common in the Israeli Aerospace Industries,” police said.

    Those allegedly involved in the criminal activities include board members and managers, as well as junior staff, and “those that are supposed to be gatekeepers and advisers,” police said.

    IAI said in a statement that it had been made aware of the probe on Wednesday and did not have further information on the details of the investigation.

    Company leadership said it had “instructed all relevant officials to cooperate fully and unreservedly with the police and to proceed according to their instructions, in order to allow a full investigation and bring to justice any who have committed offenses.”

    The statement added that “The IAI will continue to serve as a cornerstone of Israel’s security and economy.”

    Several of the people arrested are set to be brought before a judge in Rishon Lezion later Wednesday in order to keep them in custody, police said.

  2. Joe Levin
    Joe Levin says:

    More than a dozen employees of Israel’s giant state-owned weapons manufacturer have been arrested over allegations of “systematic” corruption, Israel Police said on Wednesday.

    The 13 staff of Israel Aerospace Industries (IAI) included top directors, heads of department and a prominent former military official, police said in a statement.

    The investigation concerns suspicions of bribes paid to win IAI tenders, as well as allegations of theft, breaches of trust and money laundering.

    The police did not provide any further details on the suspects or say whether the alleged corruption affected trade with foreign countries.

    But “the investigation revealed systematic criminal practices,” the police said.

    “Everywhere we looked, we found elements of corruption,” police spokesman Meirav Lapidot told Army Radio.

    Investigators searched the homes and offices of suspects.

    A court was expected to rule on the extension of their custody on Wednesday, police said.

    IAI is wholly owned by the Israeli government and is the country’s leading weapons manufacturer.

    The company employed nearly 16,000 people, according to 2015 figures, and had revenues of $3.7 billion (3.48 billion euros) last year.

    The group accounts for nearly half of Israeli arms exports, with more than three quarters of its sales abroad.

    With US firm Boeing, it has developed Israel’s anti-ballistic missile system, the Arrow 3.

  3. Joe Levin
    Joe Levin says:

    The Israel Police announced Wednesday that it has arrested 13 suspects associated with state-owned Israel Aerospace Industries for alleged offenses ranging from fraud, money laundering and breach of trust to outright theft.

    According to the police, the early morning March 13 arrests were the result of an undercover operation going back months into an array of suspected offenses involving employees, management and members of the IAI board of directors.

    “This is a complex, multi-faceted investigation, broad in scope and involving a large number of instances that prompt suspicions of a cover-up for offenses of embezzlement; fraud under severe conditions; money laundering; theft by public employees; and breach of trust,” the Israel Police’s 443 Fraud Division noted in a public statement.

    According to the police, the investigation thus far into a case known as “the 630 Affair” has uncovered “a large and varied number of involved individuals, who can be found in different levels of the company, among them, senior executives, members of the labor union, members of the board of directors, management and low-level employees.”

    Suspects, the police noted, included those “who were supposed to be guardians of the public trust, advisers, suppliers and service providers to IAI.”

    Among the arrested, according to the police, is a “former senior Israel Defense Forces officer well-known among the Israeli defense establishment.”

    The statement said that multiple government agencies participated in the investigation, including the Defense Ministry’s Malmab Internal Industrial Security Division; the Israeli Government Companies Authority; and income tax officials.

    Homes and offices of suspects were searched, as well as multiple IAI offices, including headquarters offices, the statement added.

    In a March 15 statement, IAI said the president and chief executive of the firm has ordered all relevant individuals to “fully cooperate with authorities without hesitation with the Israel Police and to act according to directives, with the purpose of concluding the investigation and bringing to justice all those who broke the law.”

    The firm added that IAI “will continue to be a cornerstone for the state of Israel’s security and its economy.”

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