Upper Nazareth Mayor Shimon Gafsou, who is suspected of receiving hundreds of thousands of shekels in bribes from a local businessman, was remanded in custody yesterday until Thursday. Ya'akov Goldberg, Gafsou's assistant, and Meshi Sinuani, director of his office, were also arrested on suspicion of serving as conduits for transfering the bribes.

In addition to suspicions of accepting bribes, the three are suspected of brokering bribery, money laundering, fraud, breach of trust and conspiracy to commit a crime.

The police's national fraud squad began investigating suspicions against Gafsou several months ago, and the investigation became overt yesterday when police officers turned up at the mayor's office and the suspects' homes. A search of Gafsou's office and home for evidence of the bribe money uncovered no such evidence.

Police suspect that Gafsou received bribes from a local businessman in return for granting permits to operate a market in the city three days a week. The business arrangement is believed to have begun in 2008, even before Gafsou was elected mayor, and continued subsequently. Investigators suspect that Gafsou received the bribes in return for favors and benefits given to the businessman.

Sources close to Gafsou said yesterday that the mayor and the businessman, who apparently provided police with evidence against him, have had disagreements. Allegedly Gafsou rejected a request that the market be closed on Thursdays, because the businessman claimed it was not a profitable day.

According to a statement from the municipality, "The mayor acted within the law and did not give in to pressure to extend the permit for operating the market. The claim that the mayor took bribes from the businessman is not logical because whoever takes bribes does not fight legal battles against the person who gives bribes, and does not assail him in the media."

During remand deliberations yesterday, the defense attorney for Goldberg and Sinuani, Pninat Yanay, inquired whether the investigators had a state witness, and whether they intended to arrest the businessman who had filed a complaint against Gafsou. The police investigators refused to respond to the questions. Yanay said that the businessman had sent a threatening text message to the mayor several weeks earlier.

Gafsou's attorney, Abraham Shay, told the court that his client was a victim of a plot to incriminate him, by an individual whose motives were not clear. Shay, who was once in charge of investigations at the police Northern District, assailed the police investigators for their work. "Last week the mayor received a person who worked with the complainant and presented him with a recording which suggests that there is an attempt to incriminate the mayor. The tape was given to the police at the Upper Nazareth station, but it is unclear whether it was relayed to the investigators."