Israeli Billionaire Beny Steinmetz Arrested

Israeli billionaire Beny Steinmetz, a well-known strategic adviser and three other businessmen were detained for questioning under caution on Monday over allegedly using fake contracts to move and launder money.

The homes and offices of some of them were raided by law enforcement Monday morning.

Technically the suspicions center on forgery, use of a forged document, money laundering, fraud, breach of trust, obstruction of justice and more.

Steinmetz was arrested in December for his suspected role in a sprawling corruption case involving tens of millions of dollars.

The police suspect that the five detainees and central suspect systemically made use of contracts for nonexistent deals, including property deals in a foreign country, to move money around and launder ill-gotten gains.

International law enforcement is involved in cracking the case, say Israeli sources.

In 2015, Romanian media reported that Steinmetz, former Yitzhak Rabin chief of staff Shimon Sheves and former adviser to Ehud Barak and Ehud Olmert Tal Silberstein were suspected of being involved in illicit real estate deals that costed the Romanian government more than $160 million.

In December 2016, Steinmetz, 60, who controls vast mining operations in Africa, among other things, was sent to house arrest in Israel in the same case, involving his mining firm BSG Resources. The Israeli police alleged that he and other Israeli expatriate had paid tens of millions of dollars to officials in Guinea to advance their businesses.

Steinmetz’s release to house arrest back then was conditional on his agreement to stay in Israel for 180 days and on a guarantee of 100 million shekels ($26 million).

The investigation into BSGR began in Guinea, which was retroactively looking into the allocation of mining rights to the Simandou deposit, the world’s largest untapped iron ore reserves, in 2008.

BSGR has denied the allegations of wrong-doing throughout and countered, in December, that Guinea was recycling old allegations and was illegally trying to take back the mining rights.

In 2014, Guinea accepted a report recommending that two iron ore concessions allocated to BSGR be voided on the grounds that they had been obtained by corrupt means.

BSGR said it denied corruption allegations and would seek arbitration.

In April 2017, apparently not despairing of regaining the mining rights of which it had been stripped,

BSGR sued none other than the billionaire George Soros, who had been advising the Guineans, for allegedly scuttling the iron mining deal by manipulating the Guinean government, and claimed $10 billion in damages.

Soros fabricated smears about BSGR, the company claimed, writing, “Soros was motivated solely by malice, as there was no economic interest he had in Guinea.”

Soros’ representatives rebutted that the claim was frivolous and a “desperate PR stunt meant to deflect attention from BSGR’s mounting legal problems across multiple jurisdictions”.

Arbitration over Simandou began in May.

BSGR used the venue to claim that its rival, the Brazilian giant Rio Tinto, acted unlawfully when it had obtained mining rights in Simandou in 1997, by deliberately moving slowly to frustrate potential rivals.

“The longer it locked up mining in Guinea, the longer Rio could charge higher prices for the mining it was doing in the rest of the world,” James Libson of Mishcon de Reya, acting for BSGR stated, according to the Telegraph. Steinmetz himself testified to the arbitrators by videolink.

Meanwhile, in late July, the U.K. announced that its Serious Fraud Office had opened an investigation into Rio Tinto’s dealings in Guinea, noting that in November 2016, the company had fired two executives for involvement in corruption.

2 replies
  1. Joe Levin
    Joe Levin says:

    Police in Israel detained the businessman Beny Steinmetz and four others for questioning in a money-laundering investigation involving real estate deals abroad.

    The five were questioned on Monday under caution, meaning they are considered suspects in the case, the Times of Israel reported.

    The suspects were brought in for questioning on suspicion of money laundering, falsifying documents, using fake documents, false registration of corporate documents, fraud, breach of corporate trust, obstruction of justice, and bribery, police said.

    Raids were also carried out at their homes and offices, according to the Times of Israel. The other four suspects were not named, but a media report identified one as a well-known figure in Israeli banking.

    A statement said police suspect the group acted “acted systematically together with the prime suspect in order to create and present fictitious contracts and transactions, among other things in real estate deals in a foreign country, for the purpose of money laundering and money transfers,” the statement said.

    A police source told The Times of Israel Steinmetz was the prime suspect in the case.

    Steinmetz, who made billions as a diamond and mining magnate, was arrested on December 19 and accused of paying millions of dollars in bribes in the Republic of Guinea in exchange for advancing his business interests in the country. He was held under house arrest at the time and later released.

    Steimetz has consistently denied any wrongdoing, calling the allegations against him the result of a conspiracy designed to make his form relinquish its rightfully-owned mining rights.

    According to Israeli media report, the current probe is linked to the Africa investigation.

    According to Forbes, Steimetz is worth $1.02 billion, making him one of Israel’s richest people.

  2. Joe Levin
    Joe Levin says:

    Israeli billionaire Beny Steinmetz was questioned under caution by the Israel Police National Fraud Unit on Monday on suspicion of bribery and money laundering. Four other businessmen were questioned as well, but their names have not been released to the media.

    The investigation centers on alleged wide-scale real estate fraud in a foreign country. Steinmetz and the others are suspected of fraud, money laundering, falsifying corporate documents, falsifying accounting records, using falsified documents, corporate breach of trust, obstruction of justice and bribery.

    Swiss and American authorities are also involved in the investigation, as are Israel’s Money Laundering and Terror Financing Prohibition Authority and the Financial Crimes and International Affairs departments at the State Attorney’s Office.

    A source familiar with the investigation said the National Fraud Unit suspects that the four businessmen had systematically collaborated with Steinmetz, who is the prime suspect, to produce fictitious contracts to support illicit real estate transactions in a foreign country, for the purpose of transferring funds and money laundering.

    Police officers raided the five suspects’ homes and offices on Monday, seizing computers and documents.

    Steinmetz, whose diverse portfolio includes diamond mining, engineering and real estate, has also been implicated in a bribery scandal in Guinea, in which he is suspected of allegedly transferring $30 million to senior public officials in 2008 to promote his mineral assets in the Simandou area in the country’s southeast.

    Israeli authorities put Steinmetz under house arrest last December in connection with that case, releasing him two weeks later without charge.

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply