Police Recommend Indicting Sharon Brothers for Fraud

Omri and Gilad Sharon, sons of former PM Ariel Sharon, allegedly brokered $3 million in bribes transferred to their father.

The national fraud squad has recommended that Omri and Gilad Sharon be indicted for mediating bribery and to indict Austrian magnate Martin Schlaff for giving bribes to the tune of $3 million. The police allege that the bribe money was given to former prime minister Ariel Sharon.

Former PM Ariel Sharon’s sons Gilad, left, and Omri.
Alon Ron

Attorney General Yehuda Weinstein and State Prosecutor Moshe Lador are to decide in the coming months whether to adopt the police recommendation. The recommendation was made a few weeks ago, Haaretz learned yesterday, following an investigation that began in 2002, after a friend of the Sharon family, South African businessman Cyril Kern deposited a loan of $1.5 million into one of the Sharon family bank accounts. Police then asked South African authorities to launch a judicial inquiry into the matter. The request for the investigation was reported at the time by Baruch Kra in Haaretz.

It was suspected that Kern was a front man for Schlaff, who had economic interests in Israel. Kern transfered the money to the Sharon family from an Austrian bank, BAWAG, which was Schlaff's partner in the Jericho casino. Schlaff was considered a major strategic partner in the casino at the time.

Later, it is believed, Sharon paid back the loan to Kern; however, police suspect that the money was given to a company owned by the Schlaff family. During November and December 2002, two more deposits were transferred to the Sharon family's accounts, totaling approximately $3 million.

The police say they have evidence that the original loan, from Kern to Gilad Sharon, as well as the $3 million loan, came from a company controlled by Schlaff. Since the affair broke, Schlaff has stayed away from Israel, even missing his father's recent funeral in Jerusalem.

Several weeks ago, Schlaff's brother, James Schlaff, came to Israel and was summoned to testify in the case. James Schlaff allegedly assisted Kern in opening the account at the BAWAG bank.

The police made their recommendation to indict despite the fact that the main suspect in the case, former prime minister Ariel Sharon, would not be fit to stand trial due to his medical condition. Former attorney general Menachem Mazuz said before he retired from his post that he had decided over the years the case was under investigation not to close it because "the suspicions are very serious and it is very much in the public's interest." Before he stepped down, Mazuz had wanted to make a decision on the case, but he ran out of time and passed it on to his successor.

While investigating money that allegedly went into the Sharon family's bank accounts, the police also looked into whether Ariel Sharon and his associates assisted Schlaff's business interests in Israel while Sharon was prime minister, particularly Schlaff's unsuccessful attempt to establish a floating casino outside of Israel's territorial waters near Eilat.

Gilad Sharon has maintained his right to remain silent throughout his questioning by police. The police were also unable to obtain Martin Schlaff's testimony from the judicial inquiry in Austria.