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Hapoalim may face heavy fines over Hayarkon money-laundering scandal By Amit Benaroia Tags: israel, tel aviv  Bank Hapoalim may face fines, on top of other penalties, for the money-laundering affair uncovered at its Hayarkon branch in Tel Aviv, in early 2005. The Bank of Israel is considering convening its sanctions committee, which is empowered to impose fines. In the case of Hapoalim, these could amount to millions of shekels. The investigation into the goings-on at Bank Hapoalim Hayarkon branch began in early 2005. Workers and customers of the branch were questioned and the authorities froze hundreds of millions of shekels held in accounts there. Three years later, however, no indictments have been handed down, let alone convictions. The prosecution did, however, relieve several foreign residents, many of the former Soviet states, of potential charges in exchange for about NIS 95 million in payments. The only evidentiary hearing held in the Hayarkon case to date, involving three Hapoalim clients and two bank clerks, began last week at the Tel Aviv District Court. The two clerks were the heads of the branch's "France desk." The prosecution is still mulling whether to press charges against other clients. Advertisement The sanctions committee would base its work on documents that the Bank of Israel has been working on for months, enumerating Hapoalim's violations of the anti-money-laundering law. The central bank's supervisor of banks, Roni Hizkiyahu, only recently finished drafting the document, and should be ready to sign it shortly. Hizkiyahu himself would be a member of the Sanctions Committee, as would another representative of his office, and an official from the Israel Money Laundering Prohibition Authority. Sources knowledgeable about the case denied that a request has been made sent to convene a sanctions committee, noting that the police haven't finished their investigation yet, and that material collected by the police is not yet admissible. There is, nonetheless, precedent for the committee. A year ago Bank Leumi was hit with an NIS 425,000 fine for violating anti-money-laundering rules, and First International Bank of Israel was fined NIS 3.5 million by a sanctions committee. The supervisor of banks found three foci of trouble at the bank. One was a failure to identify customers properly. Another was a failure to report dubious transactions to the Israel Money Laundering Prohibition Authority. The third was the bank's failure to properly monitor dubious accounts. Related articles: Bank stocks soar despite Hapoalim woes Bank Hapoalim lowers targeted profits for 2008 Leumi outdid Hapoalim in 2007 with NIS 3.3 billion net profit Bookmark to del.icio.us   Marketing ploy Israeli satellite TV has a new star - Mahmoud Ahmadinejad. Through her lens Madonna's next project: documentary about the Israeli-Arab conflict.

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