Israelis suspected of US tax return fraud arrested
Police raid homes of suspects who allegedly cooperated with Americans to swindle tens of millions of dollars from IRS, transfer money to Israeli bank accounts. Police suspect 62-year-old American Jew who fled to Israel as head of operation
Eli Senyor • Ynet
Police suspect that seven Israelis and Americans embezzled tens of millions of dollars from the US tax authorities and transferred the money to Israel.
The National Fraud Unit arrested the Israeli suspects, and their remand hearing is scheduled for Monday at the Tel Aviv Magistrate's Court.
The investigation, dubbed "American Pie" began several months ago, when the federal authorities asked Israel to probe the case. Head of the National Fraud Unit Brigadier-General Shlomi Ayalon, Who met with the Americans, tasked an investigation team headed by Deputy Commander Yoran Naaman, with the case.
In recent months, the unit has been working undercover with the American tax authority and police to investigate suspicions of money laundering to Israel.
The probe revealed that a 62-year-old American Jew, who had fled to the US for Israel several years ago after his involvement in various fraud felonies, was behind the operation.
The suspects allegedly systematically filed fraudulent reports to the IRS, and then transferred the tax returns they received to bank accounts in Israel. Police believe the suspects used the names of federal prisoners to file their reports.
Investigators managed to track the movement of tens of millions of dollars from the US to Israel.
Besides money laundering, the suspects could be facing charges of fraudulent receipt of funds under aggravated circumstances, forgery under aggravating circumstances, and various tax felonies
The investigation came to light on Monday when the National Fraud Unit investigators raided the homes of the suspects and arrested them. Meanwhile, police briefed the American authorities on the developments and arrests in the US are likely to be made in the near future.
This is not the first time Israelis are suspected of embezzling money from the Americans. The US recently requested the extradition of 11 Israelis suspected of scamming elderly Americans by phoning them and informing them they had won the lottery.
The victims were told they would have to deposit money in Israel in order to receive their winnings, and were never contacted again by the scammers.
The 62-year-old ringleader is Marvin Berkowitz.
Berkowitz was convicted in 1988 of two counts of obstruction of justice and one count of stealing government property. He was released from prison on June 4, 1993.
Army radio is reporting Berkowitz made aliya (immigrated to Israel) in 2003.
[Hat Tips: Seymour, YBM.]