Tel Aviv prosecutors on Wednesday filed a long-awaited indictment against a father and son who the state alleged concealed 760 million shekels ($197 million) in revenues from tax collectors.
- 19 Israelis Arrested in Fraud and Money Laundering Probe
- Lyin’ to Zion: Israel Is Haven for Fraudsters From France
- $55m Fraud Case Reveals Cracks in Israel's Exclusive Diamond Exchange Club
The indictment for tax evasion and money laundering was filed against Boris Weissman and his son, Avissar Weissman, who had once owned a chain of clinics for treating sexual dysfunction known as the On Clinics, and more recently had run a chain of 60 luxury clinics overseas.
Three others named in the indictment were Meron Neeman, Moshe Rachamut and Arik Yisraeli, who are suspected of abetting the alleged tax evasion and money laundering by the Weissmans.
The indictment filed in Tel Aviv District Court said the two conspired to conceal from Israeli tax authorities the fact that the chain was managed and controlled in Israel by putting formal ownership in the hands of companies in the Netherlands Antilles.
“The defendants used fraud, cunning and subterfuge to intentionally and deliberately ensure that the On Clinic group avoided paying tax in Israel,” the indictment said. “They hid in various ways their control of the On Clinic group and their bank accounts in Switzerland to ensure that a tax assessor would not realize the companies are liable for tax in Israel.”
All told, the clinics yielded some 112 million shekels in profits, of which more than 63 million were personally paid to the father and son, prosecutors alleged. They said Boris and Avissar Weissman set up straw companies in the Virgin Islands and Panama, which received most of the revenues generated by the clinics, and deposited the money in accounts with the Swiss bank UBS.
In fact, it was the UBS connection that exposed the Weissmans, after investigators pursuing suspicions against the pair arrested the UBS banker Roni Elias in Tel Aviv in June 2014, and found a list of clients on his laptop with unreported accounts. Multiple arrests followed.
Not all of the money generated by the clinics was transferred to UBS. Prosecutors alleged that profits from the group’s Romanian operations were moved directly to Israel in cash by Neeman, Rachamut and Yisraeli.
According to the indictment, Neeman, who had been in charge of the group’s Romanian business since 2005, was responsible for transferring the money, which represented most of the profits earned in the country, to Israel from 2007 to 2010. An agent was sent to Israel with the cash, which prosecutors said amounted to 29.5 million shekels.
In 2011-13, Rachamut took over responsibility for moving the cash, which in those years amounted to about 8 million shekels, the indictment alleged. Yisraeli sometime acted as a go-between in those years, offering Israeli gamblers playing at Romanian casinos local cash in exchange for equivalent sums in shekels in Israel.
There was no immediate comment from the Weissmans’ attorneys. A lawyer representing Yisraeli said any role his client played was minor and that he was incapable of criminal acts.