Another corruption investigation is under way at Israel Railways, after 13 employees were suspected of defrauding the government company of millions of shekels, Haaretz has learned. The group - 12 cashiers and a regional manager - allegedly pocketed cash from ticket sales over an unknown period of time.
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The company invited on Sunday the employees, seven of whom have admitted to stealing, to pre-dismissal hearings as required by law. Israel Railways gave the results of their investigation to the Israel Police.
"This is the tip of the iceberg," one person involved in the investigation said Sunday, adding, "It is still not clear how long the embezzlement has been going on, the amounts and who else was involved," he said.
As part of a collective bargaining agreement signed in December, 146 cashiers who had worked for the railway for years through an employment agency became Israel Railways employees. After IR took over the supervision of these ticket sellers, significant discrepancies in the recording of ticket revenues became apparent. Questionable accounting was found at Tel Aviv’s Haganah and Savidor stations as well as at two stations in the Sharon region, among others.
After the first suspicions were raised, management conducted an undercover investigation with the help of a private detective agency. Investigators determined that the cashiers were somehow able to cause the cash registers not to record the sales of some tickets issued to passengers - and these cashiers were able to sell dozens of tickets a day and pocket the money.
After months of undercover investigation, last week management checked a number of the suspects. Some were found with tickets that had never been recorded in the company's systems. One employee was in possession of tens of thousands of shekels in cash. During preliminary questioning, seven of the cashiers admitted stealing thousands of shekels a month from the company. They were fired immediately.
Israel Railways does not yet know how much money was stolen and how long the fraud continued. IR reported NIS 1.6 billion in revenues for 2012.
It is also not known whether other employees were involved or aware of the embezzlement. The responsibility of the employment agency that originally employed the cashiers is also being examined.
The investigation is part of a broader “cleanup" launched by IR a year ago, after new monitoring protocols uncovered a large number of financial irregularities involving employers and contractors. Late last year 11 IR employees were held on suspicion of involvement in a “sting” against banks in northern Israel: A train conductor allegedly forged pay stubs, showing fat salaries, that employees then used to obtain loans they would otherwise never have been able to get. Police estimate the employees obtained some NIS 700,000 in loans using the forged stubs.
Two months later, private detectives investigated allegations that nine IR cleaning supervisors arranged for the company to pay millions of shekels to contractors for work that was never done. Evidence in this case was handed over to the police.
Not all of the irregularities turned up in IR’s clampdown were strictly criminal, such as the disclosure that the company spent some NIS 14 million on taxis for its employees.
The CEO of Israel Railways, Boaz Zafrir, told Haaretz Sunday: "Most of Israel Railways employees come to earn an honest living. We regret that we have run into a minority that causes damage and defames the rest of the employees. We will continue to deal with this minority to the fulll extent of the law."