Israeli officials say they want to question Lev Leviev, the business baron whose companies are at the heart of a huge gem-smuggling network that has run for years. Among six people detained for questioning on Monday are two of their relatives and four others who are or have been involved in their businesses in Israel and Russia. Police have asked the court to extend the detention of the six suspects.
A source close to Leviev said he could return to Israel voluntarily for questioning.
A police representative said, "This is an investigation that began in late March 2018. Criminal offenses are attributed to all suspects in the operation, within the scope of their work with LLD, with the exception of a suspect. 81 million dollars (300 million shekels). "
The lawyer for one of Leviev's family members said: "Is it true that the facts of this investigation have leaked and been published in recent days?"
Amit Hadad claims that his client did not work for the company.
"True, he [Hadad’s clients] holds 1 percent of the shares, he was CEO and was replaced in 2011 by Zvulun Leviev, "said the representative, who confirmed that there was a dispute between the brothers, although he added" I just learned it today. "
The Leviev LLD diamond company responded in a statement: "Mr. Leviev and the companies under his control are acting by the appropriate standards while complying with the law, and we hope that the matter will be clarified soon and the suspicions proving to be without fundament ".
The arrests occurred after the capture of a smuggler "mule" at Ben Gurion International Airport a few months ago. This triggered a joint investigation by police and customs, after which the state suspected that for years, people working for Leviev were involved in smuggling diamonds worth tens of millions or possibly hundreds of millions of shekels (in total) to Israel.
The LLD of Leviev's company stated that "Mr. Leviev and the companies he controls operate according to the appropriate standards, and in accordance with the law. We hope that the matter is clarified quickly and that the suspicions prove to be unfounded."
Police and tax authorities suspect money laundering, offenses against various tax laws, conspiring to commit a crime, forging documentation, fraud and more.
A state witness, whose name has emerged in connection with another corruption case, is assisting the police in the investigation, the details of which are under a gag order, imposed by Judge Guy Avnon in the Rishon Letzion District Court.
The investigation began a few months ago when customs officials at Ben-Gurion Airport in Tel Aviv seized a man, associated with Leviev's business group, allegedly trying to smuggle diamonds worth hundreds of thousands of shekels to Israel. He and a person accompanying him tried to pass the "Nothing to Declare" path, though he supposedly hid the precious stones inside his body and was caught.
The interrogation of the two suspects led the police to discover what appears to be a vast gem-smuggling business run by state testimony. With their cooperation, a secret investigation began.
It lasted several months and found evidence of methodical smuggling of diamonds for Israel.
The extent of smuggling may have reached hundreds of millions of shekels, all within the structure of Leviev's group.
However, as I said, the police arrested his brother. Sources in the diamond industry and the social circle of the brothers say that the two have been struggling for years and are not in contact during this period. However, the brother may still have shares in Leviev's business.
Among the six prisons is the former manager of a diamond polishing factory that Leviev owns in Russia. All others work or work for their companies in Russia and Israel.
The man who broke De Beers
Lev Leviev was born in the Soviet Uzbek Republic and immigrated to Israel at age 14. He has become one of the most successful and diversified entrepreneurs in the world. Leviev is most famous for breaking the monopoly of the world diamond market, maintained by the De Beers cartel in the 1980s.
He also invested heavily in construction and real estate, including through publicly traded companies in Israel, in locations ranging from the West Bank to Wall Street. The real estate company most closely associated with its name was Africa Israel Investments, which it acquired from Bank Leumi, and which ended in a debt deal with the creditors. In September, the court approved the acquisition of Israeli businessman Moti Ben-Moshe for Israeli Africa and assured that bondholders would receive most of the money – 2.3 billion shekels out of the 3 billion owed to them.
Although he is a hero of the ultra-Orthodox Chadian movement to which he belongs, including for his philanthropic efforts, Leviev was criticized and his business boycotted construction projects in settlements in the West Bank. He was also pursued on charges of abuse in precious stone mines in Angola.
The close relationship between Leviev and Russian President Vladimir Putin has been widely publicized.
Leviev has been the target of several investigations in recent months, but enforcement officials say the investigation is currently confined to his diamond business.
Because your group may be involved in smuggling diamonds, the first place is not clear. The tax of a diamond company is based on sales volume, not profit. Therefore, there is no tax advertisement on smuggling of diamonds to Israel unless they are then smuggled back, and the sale was registered in a third country with lower rates (such as Belgium or Dubai).
One reason for smuggling might be that the stones were of dubious origin; or their seller was not licensed to market them; or have been illegally extracted, for example. In any case, bringing them to Israel without declaring them is illegal.
Eyal Besserglick, a lawyer for one of the suspects (who is not related to Leviev), said he is confident that the suspicions will be rebutted and said his client has nothing to do with the whole case. "He has worked with the businessman for more than six years and there is no evidence linking him to criminal activity," Besserglick said.
Another unclear aspect is how this case will affect the Israeli diamond industry. On the one hand, Leviev is one of the largest importers of rough diamonds in the country; Their businesses provide work for dozens of other companies that stake and market the stones through the Ramat Gan Diamond Exchange. These companies employ hundreds of people. If your business hurts, dozens more. And this is not a good time for Israel's diamond business: demand is falling and profits are down.
On the other hand, the businessman in question explores the stones partly in Russia, where the name of the game is tied in the Kremlin. In this regard, your business is seemingly secure.