Twenty-five Arrested in Israel Railways Corruption Probe

Police uncover scam involving unsubstantiated billing for cleaning work never carried out.

Jasmin Gueta
Avi Bar-Eli
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Siemens passenger cars pulling into a Tel Aviv train station.Credit: Moti Kimche
Jasmin Gueta
Avi Bar-Eli

Investigators from the police’s Lahav 433 unit and Tax Authority inspectors arrested and detained 25 people on Tuesday connected with Israel Railways suspected of accepting bribes from cleaning and labor contractors.

Investigators said they believe that a group of managers and inspectors from the transportation division of the railway company took the money in return for fixing tenders and ignoring whether contracted work was done incorrectly or not at all.

Among the 25 are railway inspectors who allegedly falsified reports on cleaning services done on train cars to ensure that the contracted companies were paid. Investigators also believe that the cleaning contractors’ owners and managers systematically produced inflated or fictitious bills, and filed false tax statements in cooperation with subcontractors.

Sixteen of those allegedly involved were brought on Tuesday to the Rishon Letzion Magistrate's Court for an extension for their remand. They include Ori Elbaz, CEO of the labor contracting company S. Nir, which supplied cleaning services to the railways, and other employees of the company. Khalifa Cohen, among the principals of a company called Eshnav 2010, and Rayan Zeyad, a principal of A.M. Holdings were also arrested.

The remands of all three were extended for a week by Judge Shimon Stein out of concern that they might try to disrupt the investigation.

Elbaz’s attorney, David Libai, told the court that his client denied the allegations against him. “Elbaz manages a company that employs 2,500 workers and generates 150 million shekels," Libai said. "He is a senior person and doesn't deal with daily business, certainly not with subcontractors and managers in the field.”