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The Israel Tax Authority said on Sunday it had launched an investigation into suspicions a former basketball executive found hanged last week invested millions of dollars in players' money in a possible Ponzi scheme.

Moni Fanan, former general manager of the country's flagship international sports team, the five times European basketball champions Maccabi Tel Aviv, reportedly owed investors some $20 million and illegally ran a "private bank".

His death is being treated by police as a suicide.

Fanan's death was swiftly followed by news reports that many basketball players, executives and a referee initially netted big returns, in cash-filled envelopes, before investments with a British company went south.

"We are looking into the affair to see whether there are any criminal aspects," said Avi Arditi of the Israel Tax Authority. As part of the probe, the Tax Authority on Sunday raided the Maccabi Tel Aviv offices for any documents that could provide some lead into the alleged fraud.

Haaretz had called for a police investigation and a government inquiry to determine the impact Fanan's alleged dealings may have had on professional basketball, the country's most popular sport after soccer.

"The Fanan affair appears to be the most embarrassing scandal in the history of Israeli sports since the fixing of soccer games 40 years ago," Haaretz wrote in its editorial on Sunday.

Fanan was forced to leave Maccabi Tel Aviv last year after a rift with the club's owners. The team, one of Israel's richest, is a focus of national pride. While soccer edges basketball in local popularity, only the Maccabi Tel Aviv basketballers have brought Israel such honors in international team sports.

The global financial crisis of the past year has exposed several Ponzi, or pyramid, investment schemes, where existing investors' high returns come from the capital of newcomers. Most notable was the $65 billion fraud of American Bernard Madoff.