AG Plans to Charge Lieberman With Fraud and Money Laundering

Lieberman will receive a hearing with Attorney General Yehuda Weinstein before any indictment; the hearing process may take until the end of the summer.

Attorney General Yehuda Weinstein told Foreign Minister Avigdor Lieberman yesterday he is considering indicting him for fraud, breach of trust, witness tampering and money laundering.

Prosecutors believe that Lieberman committed the offenses during his tenure as a Knesset member and minister, using companies he set up to channel millions of dollars from private businessmen abroad.

Avigdor Lieberman
Emil Salman

Lieberman will receive a hearing with Weinstein before any indictment; the hearing process may take until the end of the summer. If indicted, Lieberman will be forced to resign, a development that could bring down the right wing government of Prime Minister Benjamin Netanyahu.

Lieberman denies all the charges and said yesterday in a speech to his Yisrael Beiteinu party that he was happy at last to have a chance to prove himself an innocent man.

Legal sources familiar with the case said that considering the enormous amount of evidence over a decade of investigations, the hearing will not take place before six months from now.

The prime minister released a statement yesterday strongly backing the minister and offering no support for the law enforcement authorities or the justice system. "I wish that Foreign Minister Lieberman will prove his innocence," Netanyahu said. "I've worked with him for many years. He is a key member of the cabinet and I hope he will continue making his contribution to the public."

The prosecution also informed Lieberman associates Yoav Many and Sharon Shalom, as well as Lieberman's daughter Michal Lieberman-Galon, that they will also be indicted on various charges in the affair.

Many is expected to be charged with abetting fraud and breach of trust, while Shalom and Lieberman-Galon are suspected of money laundering and abetting fraud and breach of trust.

The gravity of the charges means that at this stage, a plea bargain is unlikely. This means means Weinstein may not make the final decision on whether to indict Lieberman before April 2012.

The affair began in 1997. Lieberman, who retired as director-general of the prime minister's office, set up two companies, one in Israel and one in Cyprus.

According to evidence amassed by the national fraud squad, since that time, including during Lieberman's terms as a minister and MK, he established and maintained connections with businessmen in Israel and abroad. He allegedly did this even as he told the state comptroller that he had sold his stake in the firms and was no longer to linked to them.

These connections allegedly resulted in millions of dollars of profit for the companies, including funds that were completely unconnected to their business field.

According to the prosecution, Lieberman's companies maintained financial relationships with a small circle of foreign businessmen with actual or potential business interests in Israel. Among these businessmen were Martin Schlaff, Michael Cherney, Dan Gertler and Daniel Gittenstein.

As Lieberman prepared to take his first ministerial office, he and his attorney Yoav Many are believed to have conspired and planned to illegally continue this business activity. Many and Lieberman actively and methodically worked to conceal these transactions, while engaging in systematic fraud, the prosecution says.

The Justice Ministry said yesterday Lieberman continued receiving lump sums during his public service through new companies created or acquired in Israel, Cyprus, and the British Virgin Islands. Although Lieberman maintained a connection to the companies, the ministry said, they were registered by other people, some of whom served as front men.

The administrative aspects of running the companies were done by a Cypriot law office, which operated under Many's instructions. They allegedly were told never to mention Lieberman's name in any documents or correspondence related to the companies, and not to send any documents to Israel.

As part of the camouflage, Lieberman set up a new company while he was out of office. While he allegedly controlled the firm and was the main beneficiary of its profits, his daughter, then 21, was registered as the main stockholder.

According to the prosecution, Lieberman worked to conceal his involvement in the company by causing a false report to be sent to a bank, contrary to the law against money laundering. The company allegedly allowed Lieberman to continue receiving vast sums even after he returned to politics in 2006.

Until 2006, Lieberman allegedly used the company's profits for his private and political needs. The company gave Lieberman payments above $2.5 million, of which $1.2 million were received while Lieberman served in public office.

A statement released by Weinstein yesterday noted that through this conduct, Lieberman put himself in a position of potential dependency on his business associates, or in a situation of potential conflict of interest between his public activity and his commitment to these individuals.

Lieberman's attorneys, Jacob Weinroth and Yaron Kosteliz, said yesterday that after 15 years of Israel's longest-ever investigation against a single person, they welcome the opportunity finally granted to the minister to present his arguments to the attorney general and to convince him he did nothing wrong.

"It's not for nothing that absent from the prosecution's statement is the most important suspicion for which the minister was interrogated all these years - bribery," they said in a statement. "We are convinced this will be the fate of all the other claims as well."