Police question Gaydamak over Hapoalim money laundering

The police also detained another suspect whom they claim is affiliated with Arkady Gaydamak.

The Israel Police National Serious and International Crimes Unit have been questioning businessman Arkady Gaydamak under caution for ten hours in the money laundering affair at Bank Hapoalim’s (LSE:BKHD; TASE:POLI) Hayarkon branch in Tel Aviv. The police began questioning Gaydamak, 53, at the unit’s offices in Petah Tikva last night. This morning, police investigators accompanied Gaydamak while they conducted a search of his home in Caesarea.

Following the search, Gaydamak was taken back to the police unit for further questioning, which lasted until 12:30 in the afternoon. He was released conditionally, required to deposit a $1 million bank guarantee, and forbidden to leave Israel for 30 days.

Police sources said Gaydamak was cooperating with the investigation, and answered the investigators’ questions. However, he will probably be recalled for questioning shortly.

The police also detained another suspect in the affair. The police claim that this suspect, who arrived in Israel last night, is affiliated with Gaydamak.

An examination of Gaydamak’s bank account at Bank Hapoalim discovered large sums of money (apparently $50 million). Following an undercover investigation against Gaydamak, the police say they intend to freeze his account at Bank Hapoalim. The police are now investigating whether Gaydamak obtained information about the investigation, and if so, whether the leak came from within the National Serious and International Crimes Unit or other police unit.

Two weeks ago, the police questioned Israel’s Ambassador to the UK Zvi Hefetz in the money laundering affair. Hefetz was the right-hand man of Russian-Israeli tycoon Vladimir Gusinsky, representing him on the board of Maariv Holdings Ltd. (TASE:MARV).

Last night, Gaydamak celebrated the 3:2 victory of his football club, Betar Jerusalem, over the second-ranking club in the premier league, Bnei Yehuda. Gaydamak was present at the stadium, encouraging his club’s supporters.

Gaydamak was appointed president of the Betar Movement a few weeks ago. Last night, he announced that he intended to found a new political party, to be called Betar. In an interview with Russian-language cable station Channel 9, he said he wanted “to renew the era of Betar as a political movement that will run in the elections for Knesset.”

A press release last night on his behalf stated that Gaydamak planned to restore Betar to “its historic place on the social and political map, with an emphasis on Zionist values, education and social affairs, fostering Jewish issues, and immigration.”

Israelis became aware of Gaydamak when he donated money to the Bnei Sakhnin football club, and then unexpectedly bought the Betar Jerusalem football club a month after buying the Hapoel Jerusalem basketball club.

Gaydamak first moved to Israel from Russia in 1972, settling in Kibbutz Beit Hashita. Six months in a kibbutz was enough to remind him of the communist system he had fled, and he moved to Haifa, where he worked as a seaman on a Zim Integrated Shipping Services Ltd. ship. On a voyage to France, he decided not to return to Israel.

In France, Gaydamak raised a family and founded a company for technical translations, which aroused the interest of groups in the Soviet government. He maintained economic ties with the USSR during the perestroika era of the late 1980s, but most of his fortune was made after linking up with the son of then-French president Francois Mitterand.

In the early 1990s, Gaydamak and Mitterand junior made arms deals between the USSR, Czechoslovakia and Angola. Gaydamak even bought Angola’s debt to the USSR. Angola paid Gaydamak in oil and diamonds, which he marketed internationally. He met Israeli diamond merchant Lev Leviev during these deals.

Gaydamak returned to Israel in 1998, obtained citizenship, and founded a security consultancy firm headed by Danny Yatom, a former IDF major general and advisor on diplomatic and security affairs to former Prime Minister Ehud Barak.

The French authorities subsequently opened an investigation of Gaydamak on suspicion of bribery and tax evasion related to his arms deals. The French issued an arrest warrant against him. Gaydamak claims that he owns an agricultural company, bank, and other enterprises in Russia, and that the French warrant was due to his involvement in the Angolan civil war. He said the warrant was “political persecution.”

Published by Globes [online], Israel business news - www.globes.co.il - on November 28, 2005

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