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The Tax Authority yesterday began an investigation into the "gray market bank" allegedly operated by Moni Fanan, the former shareholder in and manager of the Maccabi Tel Aviv basketball club, who committed suicide last Monday amid rumors of his financial ruin.

Investigators raided the offices of Maccabi Tel Aviv and of Zion Nathan, the club's former accountant, seizing hundreds of documents and confiscating computer disks. They also grilled Nathan and present accountant Doron Lev, as well as Ami Biton, the club's operations manager. Further moves by the Tax Authority are expected today.

The mood at the Tax Authority has been tense in recent days following media allegations that it had been negligent regarding Fanan's "bank," which he ran for years. Investigators say the case is a complex one, and they have been inundated with new information, almost all of it anonymous in origin. Investigators will probably be sent to Europe and the United States to question foreign businessmen and basketball players.

The Tax Authority is looking for evidence of tax fraud by Fanan and people who invested money with him, to back up suspicions that they dodged paying capital gains tax. Sources close to the Tax Authority estimate that in the last two years, Fanan's "bank" turned over about NIS 100 million, and he had about 200 clients.

The Tax Authority is not delving into ethical questions relating to the future of Israeli sport - for instance whether coaches, referees and rival team players also invested through Fanan.

Investigators believe the reason Fanan took his own life last week was his inability to return millions of shekels in debt.

They are also investigating whether prior to his suicide, he or his associates destroyed documents. He is believed to have kept thorough records of all his financial activities, which the Tax Authority would like to find.