Thirteen people suspected of fraud and bribery were arrested this morning including executives and office holders at Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and its suppliers as well as a former senior IDF officer who is known in the defense establishment. The arrests followed a covert operation lasting several months by the Israel Police Lahav 433 national investigation unit together with the Ministry of Defense director of security of the defense establishment and Israel Tax Authority Tel Aviv office investigators. Others were detained for questioning as part of the investigation.
According to the police the investigation is extensive and far-reaching and involves complex sub-investigations encompassing allegations of encompassing a large range of offenses including bribery, aggravated fraud, money laundering, theft by a public employee, and breach of trust.
The undercover probe has so far found systematic criminal behavior and suspicions of deep-rooted corrupt practices at Israel Aerospace Industries.
The affair, which has been called case 630, includes many and a diverse range of employees at various levels of the State-owned defense company including senior executives, board members, workers committee members, managers, and junior employees, as well as consultants, suppliers, and IAI service providers.
The investigation has been handled by the Israel Police special department for public servant bribery at government-owned companies as well as other bodies including the economic department of the State Attorney's Office.
As part of this morning's arrests, the police conducted searches in the suspect's homes, the offices of IAI and the private suppliers involved. Depending on developments, suspects may be brought to the Rishon Lezion Magistrates Court later today to have their remands extended.
IAI said, "This morning, IAI became aware of an Israel Police investigation regarding the company. IAI's management has no further details regarding this issue. IAI's CEO has directed all relevant parties to cooperate fully, as and where necessary, with the Israel Police, to act in accordance with its regulations, and help to bring the current investigation to a successful conclusion and charge all those who may have committed an offence. Israel Aerospace Industries continues to play a central role in both the security and economy of the State of Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2017
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