Israeli Tycoon Beny Steinmetz Arrested in Massive Global Bribery Case

Israeli tycoon Beny Steinmetz was detained by police on Monday for his suspected role a sprawling corruption case involving tens of millions of dollars.

Steinmetz is suspected of bribing officials in Guinea and of money laundering. His house and offices were raided Monday morning, police said.

He was sent to two weeks house arrest by an Israeli court.

His Israeli and French passports were confiscated and he is barred from leaving Israel for 180 days.

His bail was put at 50 million shekel in cash and an additional 50 million shekel in properties. He will be able to post bail in three days.

The businessman owns a mining company that had won mining rights in Guinea.

Steinmetz was brought for a remand hearing at 1 P.M.

Steinmetz and other Israelis are suspected payed out tens of millions in bribes to officials in Conakry, capital of the Republic of Guinea, in return for their help in prompting local businesses interests.

The investigation is being conducted together with law enforcement officials from the United States, Switzerland and Guinea, as part of a global push led by the OECD to address official corruption in member states. In Israel, the police’s fraud squad is working with state prosecutors and local tax officials.

The probe was made public on Monday after a covert investigation found evidence supporting the suspicions, police said.

Others are expected to be called in for questioning as the investigation continues.

Mining company BSG Resources earlier said in a statement that Steinmetz’s arrest was “in the aftermath of ongoing and what BSGR believes to be obsolete investigations surrounding bribery and corruption against BSGR.” The firm added it believed the allegations to be baseless.

Steinmetz was recently said to be embroiled in another corruption story in Africa as part of a clash with competitors.

According to foreign reports covering the story, Steinmetz’s competitor spent millions to create conspiracy against him and prevent one of his subsidiaries from winning a coveted contract.

2 replies
  1. Joe Levin
    Joe Levin says:

    Diamond-mining tycoon Beny Steinmetz was identified as the billionaire Israeli businessman who was detained by police Monday in relation to suspected corruption and bribery in African.

    The Israeli mogul was suspected of bribing Guinean public officials sums amounting up to tens of millions of dollars in Guinea’s capital of Conakry to further his business interests.

    Police raided the suspect’s office on Monday and said more arrests were expected.

    The investigation was being conducted in coordination with law enforcement agencies from Switzerland, the United States, and Guinea and is part of an OECD-led effort to combat bribery of public officials around the world.

    In a statement, police said that an undercover investigation in cooperation with international law enforcement found evidence of the suspected bribes.

    Steinmetz was set to be brought to the Rishon Lezion court on Monday, where police are seeking to extend his detention.

    A spokesman for Steinmetz in Israel said he was not commenting at this stage.

    Mining company BSG Resources (BSGR) said the investigations were initiated by the government of Guinea with international police organisations in the United States, Britain and Switzerland.

    BSGR described Steinmetz as an adviser to the company, which is headquartered in the Channel Islands and is a mining arm of Steinmetz’s business conglomerate.

    A BSGR spokesman told Reuters that Steinmetz does not sit on BSGR’s board or have an executive role, but “is the beneficiary of the foundation which owns BSG Resources”.

    A government spokesman declined to say whether Guinea was involved in the case but said the government would fight corruption and uphold the principle of judicial independence.

    “The Guinean government will assume its responsibilities and will respect the commitment of the head of state to fight against corruption,” Damantang Albert Camara said.

  2. Joe Levin
    Joe Levin says:

    One of the world’s wealthiest men has been arrested in Israel over claims that he paid millions of dollars in bribes to secure mineral assets in one of the world’s poorest nations.

    Beny Steinmetz is alleged to have arranged for the bribes to be paid so that his company, BSGR, could secure half the rights to a lucrative iron ore deposit in the west African country of Guinea.

    He appeared in court in Israel on Monday after police raided his Israeli home and offices. The court later released him for two weeks, under house arrest.

    Police said Steinmetz was also suspected of money laundering. His Israeli and French passports have been confiscated, and he has been told that he cannot leave Israel for 180 days.

    Steinmetz and BSGR claim to have won the right to extract the ore in return for a pledge to invest $165m in an exploration programme in the Simandou area in the remote south-east of the country in 2008. Eighteen months later the company announced that it had sold half its stake for $2.5bn.

    According to an Israeli investigation, however, Steinmetz, along with a number of other Israelis, acquired the asset by paying tens of millions of dollars in bribes to senior public officials in Guinea.

    Israeli police said in a statement: “The investigation is being carried out in cooperation with law enforcement authorities in the United States, Switzerland, Guinea and Israel, as part of an international effort led by the OECD against the bribing of public officials worldwide.

    “In light of the suspicion of the Israelis’ involvement and the ramifications their alleged criminal activity abroad would have concerning Israel, the Israel police conducted a covert investigation in coordination with authorities abroad, which served to establish the suspicions. This covert investigation was a continuation of an open investigation conducted abroad and its findings.”

    The Simandou deal has been under investigation in the US for almost four years, with a grand jury examining allegations that the country’s Foreign Corrupt Practices Act had been breached.

    In April 2013, when Steinmetz was in control of BSGR through family trusts, one of his representatives was arrested in Florida. The FBI covertly recorded Frederic Cilins while he attempted to persuade the widow of a former dictator of Guinea to destroy a number of documents that allegedly detailed the payment of bribes.

    Cilins was subsequently jailed for two years after admitting that he had attempted to obstruct a criminal investigation.

    The arrest of Steinmetz, a 60-year-old diamond magnate, follows a meeting that Israeli prosecutors held in New York in October with their counterparts from the US, Switzerland and Guinea. The Israelis also travelled to Florida, where they are thought to have interviewed Mamadie Touré, the widow of the late dictator Lansana Conté.

    Guinea’s former minister of mines Mahmoud Thiam was arrested in New York last week on charges he was involved in bribery payments linked to Guinea’s mining industry.

    In a statement on Monday, BSGR confirmed Steinmetz had been detained, and said: “This development is in the aftermath of ongoing and what BSGR believes to be obsolete investigations against BSGR which were initiated by the government of Guinea.” It added that the allegations of bribery were “baseless”.

    BSGR, which is registered on Guernsey, describes Steinmetz as an “adviser”, but confirms that he is the beneficiary of the foundation that owns it.

    A spokesman for Steinmetz in Israel said he was not commenting at this stage.

    BSGR was stripped of its rights to the Simandou concession after an investigation by a newly elected government in Guinea concluded that it had been acquired through corruption.

    With an estimated 2bn tonnes of reserves of the highest quality iron ore, Simandou should be the centre of one of the largest and most lucrative mining operations.

    According to recent estimates, the reserves are worth around $110bn (£89bn), and their exploitation could bring enormous benefits for the impoverished nation. The government of Guinea has estimated that the extraction of Simandou’s ore could have doubled the size of its economy.

    In recent years, however, the reserves have been the subject of litigation involving BSGR and the giant mining corporations Rio Tinto and Vale. Currently, with a global oversupply of iron ore and low commodity prices, the mining project is stalled.

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