A new corruption scandal has hit Israel Railways. The Israel Police economic crime unit Lahav 433 has detained for questioning more than 25 people suspected of being implicated in an affair involving bribery, fraud, offences under the VAT Law and the Income Tax Ordinance, and money laundering. The scope of the offences is estimated to be in the tens of millions of shekels.
The arrests were made at the end of a covert investigation by the Israel Police and the Tax Authority. The suspicion is that managers and inspectors in Israel Railway's sanitation division, employees of cleaning contractors and manpower services companies and others forged and altered railway sanitation inspection documents in order to inflate sums paid by Israel Railways to contractors in this area, in return for benefits in kind.
The investigation is being carried out with the full cooperation of Israel Railways. This morning, investigators carried out searches at the homes and offices of the suspects, and seized property and documents.
It is also suspected the owners and managers of the contractors systematically issued inflated and fictitious invoices to corporations to which they provided cleaning and manpower services, among them Israel Railways, and made false reports to the Tax Authority.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2014
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