Israeli Newspaper Ha´aretz, Internet Edition, February
23rd, 2001:
Israel rejects French criticism
of failure to extradite in money laundering case
By Yossi Melman
Ha'aretz Correspondent
Israeli officials are denying French allegations that Israel has
refused to extradite fugitives allegedly involved in the largest
embezzlement scheme perpetrated in France in recent years and has
even allowed them to invest the illegal spoils in Israeli banks.
A Justice Ministry spokesman termed the allegations by French
prosecution and legal investigation sources "an unprecedented attack
on Israel." He added, "The [Israeli] state attorney has
[taken] and continues to take every possible action it can to
help the French in the affair. It has been a year since the French
promised to pass on to Israel material that would make it possible to
move forward in dealing with the issue but they have not done so yet.
They have no one to blame but themselves."
This week saw the start of the trial in France of 124 defendants
charged in the largest fraud affair in France for years. They are
accused of having embezzled $77 million from 33 banks and insurance
companies in the late 1990s using a "pyramid method."
They have been charged with setting up a slew of bogus businesses,
which issued fake orders to each other, with the invoices then used
to obtain bank loans. The fake businesses would transfer an order
between one another, creating accounting chaos. The last business in
line would then declare bankruptcy.
Many of the accused are Jews, originally from North Africa, and
many of them holding the title "Rav" (rabbi). They worked in the
textile district of Paris known as Le Sentier.
At the center of the affair are 13 defendants who hold dual French
and Israeli nationality, seven of whom have fled to Israel. They
include a former Israeli army Engineering Corps staff sergeant, Chaim
Weizman, who goes by the nickname Albert and is considered "the
brain" behind the sting operation. The prosecution alleges that
Weizman escaped to Israel with $33 million of the embezzled funds and
deposited them in Israel.
French legal authorities filed an international extradition
request a year and a half ago and asked Israel to return him to
France. They allege that Israel has refrained from acceding to their
request and claim that Israeli financial institutions, particularly
the First International Bank of Israel (FIBI), were used to launder
the embezzled money.
French prosecutors allege that agents of the group would fly to
Israel to deposit the fund at FIBI branches. A FIBI spokesman said
the bank "is not involved and is not a suspect of any action
connected with laundering. The bank abides by all the rules and
regulations concerning the receiving of deposits from customers in
order to prevent possible money laundering." But it is possible that
some of the embezzled funds were laundered through money changers
operating in Israel who may not have known the source of the cash. It
is also possible that bounced checks from the fake companies that
declared bankruptcy were sold to Israeli agents for a commission.
Media reports in France have suggested that some of the suspects
contributed part of the funds to right-wing Israeli parties,
including the Likud and Shas.
Weizman gave an interview to the French newspaper Le Parisien from
his hideout in Israel, wishing "success" to his associates who are
standing trial. The interview further outraged French prosecutors.
Israeli legal sources said that after France filed an extradition
request for Weizman, a team of French investigators visited Israel
and met with representatives of the Israeli State Prosecutor's
Office. An Israeli legal source said: "We told them that the
extradition request and the evidence that accompanied it would not
stand up in an Israeli court because of differences between French
and Israel law." The source added: "We told them we would be happy to
help them in their investigation and even gave them some guidance on
how a revised extradition order and the evidence should be
presented." The source said that the French never took the
advice.
While contending that the blame for failure to take the proper
action lies with the French, Israeli legal sources acknowledged that
the affair has damaged Israel by giving it the image of a country
which provides refuge for Jewish criminals and as a place for
laundering criminally obtained funds.
