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Two senior officials of the Magen David Adom ambulance service were detained yesterday on suspicion of tax offenses that deprived the state of NIS 178.5 million.

The Tel Aviv Magistrate's Court released the two men - CEO Eli Bin and chief financial officer Ofer Dan - on condition that they stay away from work for five days and post bail of NIS 25,000 apiece. They were brought to court after having been questioned under caution for several hours by tax investigators, who had agreed to the court's terms.

The two men are suspected of having systematically abused MDA's exemption from customs duties to import products duty-free and then resell them to parties not entitled to such an exemption. The investigation, which began undercover but went public several weeks ago, is still ongoing. About a month ago, investigators raided the offices of MDA and seized numerous documents.

By law, Magen David is exempt from customs on imported medical equipment, medications, ambulances and other products essential to its mission. But investigators suspect that Bin and Ofer abused this exemption to turn a profit - for instance, by reselling some ambulances to the police, the Israel Defense Forces and other agencies without paying the requisite duties; leasing others duty-free to organizations not legally exempt from customs duties, such as the Israel Electric Corporation, other industrial companies and local authorities; dismantling ambulances for parts and selling the parts without obtaining the requisite permits from the tax authorities and paying the requisite duties; selling other medical equipment to bodies not entitled to an exemption without paying the requisite duties; and claiming customs exemptions for non-ambulance vehicles as if they were actually ambulances.

Bin told reporters that he had been forbidden to comment on the content of the probe, but said his "morale is good, as I'm certain that everything will be okay. I'm not worried about anything. This situation is very strange to me, but I can understand how the organization got into the situation. It's not me."

MDA said in a statement that though a recognized nonprofit organization, it is tax exempt, and that it had approached the tax authorities of its own initiative to determine the tax status of imported medical equipment.

"For the last month and a half, they have been looking into the matter, in full cooperation with MDA's management," the statement said, noting that both Bin and Dan had provided the investigators with their testimonies.

Bin's attorney, Gershon Gontovnik, said after the hearing that "Eli Bin, as the organization's CEO, is not involved in making tax decisions. It has an accountant and a lawyer for that. When he was made aware of the situation, he ordered it brought to the attention of the tax authorities in order to clarify the issue, and this was indeed done."

"The investigation has been going on for a month and a half," he continued, "and all the organization's employees have been asked to give statements and answer all questions. In any event, we feel it is important to point out that this is a civil case, not a criminal one."