Dor Alon VP arrested for fuel fraud - Haaretz

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Tue., November 06, 2007 Cheshvan 25, 5768

Israel Time: 01:41 (EST+7)

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Dor Alon VP arrested for fuel fraud

By Eti Aflalo and Avi Bar-Eli

tags: Israel, Alon, fuel fraud

Dor Alon V.P. marketing and sales Uri Shmuel was arrested yesterday on suspicion of selling fuel originally meant for the Palestinian Authority without reporting to the tax authority. Shmuel allegedly pocketed profits totaling about NIS 2 million from the transaction. Suspected of income and tax fraud and money laundering, the Haifa Magistrate's Court ordered him remanded for another three days.

Investigators from the tax authority raided the home of Shmuel, partner of MK Esterina Tartman (Yisrael Beitenu), and the homes of other suspects in the affair. Accounting records and computers were seized during the raid. Hundreds of thousands of shekels were also found in safes belonging to the suspects, and another $50,000 was found in a bank safe-deposit box. Shmuel is suspected of depositing the proceeds from sale of fuels in various accounts under names of family members, and even purchased properties which he registered in their names.

The Haifa Customs and VAT investigations department has been conducting a covert investigation for months, suspecting that fuels meant for use in the PA have not been reaching their destination, but are being sold within Israel off-record. In addition, some of the funds received from sales in Israel have been pocketed by a number of those involved, and not reported to tax authorities. Dor Alon supplies NIS 700 million in fuel products to the Gaza Strip annually.

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Shmuel, a reserve colonel, has been questioned in the past about fuels sold to the PA. He was also questioned in a different fraud affair in 1998. During the court hearing, Shmuel told Judge Zaid Falah that "there is no way in the world that such a thing could happen. I promise you that every liter that left Dor Alon for the PA arrived there."

The vice president of operations of Dor Alon Operations, a subsidiary of Dor Alon V.P., was also arrested just four months ago. He is suspected of fraudulent accounting practices, reporting false expense figures and padding the company's profits in its balance sheets, forcing its holding company Dor Alon to inject NIS 40 million into the company.

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