Police Recommend Criminal Charges Against Ariel Sharon's Sons in $4.5 Million Bribe Case

Gilad and Omri Sharon allegedly received the bribe from Austrian entrepreneur Martin Schlaff in exchange for aiding him to set up a floating casino off the shore of Eilat.

The police recommended yesterday that charges be brought against Gilad and Omri Sharon, the sons of former Prime Minister Ariel Sharon, who are accused of facilitating a $4.5 million bribe allegedly received from Austrian entrepreneur Martin Schlaff.

Omri Sharon and Gilad Sharon
Archive / Baz Ratner

Police said yesterday they have completed their investigation, which began in October 2001, and have concluded there is sufficient evidence to charge Ariel Sharon's sons. But they said they were still lacking some evidence because they are unable to question Schlaff or Ariel Sharon, who has been in a coma since suffering a stroke in 2006.

Investigators suspect that the money was a bribe to the Sharon family aimed at helping Schlaff set up a floating casino off the shore of Eilat, a project he was working on around the same time as the money transfers were made.

The scandal is often referred to as the Cyril Kern affair, after a South African businessman and friend of the Sharon family who is accused of setting up a front company with Gilad Sharon to launder millions of dollars from abroad. The money is thought to have been transferred to Gilad's account in Tel Aviv through an Austrian bank.

In 2001 Ariel Sharon announced that he planned to return $1.5 million to American donors because the state comptroller found that it was illegal to receive such large amounts of money, which were donated to Sharon's campaign for Likud chairman earlier that year.

Police suspect that a total of $4.5 million was passed on by Schlaff to the Sharon family, with $1.5 million returned to American donors, $1.5 million staying in the bank accounts of the Sharon family, and $1.5 million returned to Kern by Gilad Sharon in late 2002.

Haaretz has learned that this sum was transferred to a company clearly affiliated with Schlaff: the Liechtenstein-based Universal Finanz Holding. The final stop in the return of the loan is another Liechtenstein-based company that is controlled by a business partner of Schlaff's in Germany.

Gilad Sharon has maintained his right to remain silent.

In early 2003 Haaretz revealed that the State Prosecutor's Office had contacted authorities in South Africa as part of an investigation of Kern, whom they suspected had bribed Sharon. Investigators in Israel said Sharon had transferred $1.5 million into an Austrian bank account belonging to Gilad Sharon. The person who helped open the bank account was Martin Schlaff's brother, James, who gave a deposition in the case a year ago.

In early 2002, Gilad moved the money into a joint bank account held with his father in Israel. In late 2002, an additional $3 million was transferred from Getex, a large exporter of seeds (peas, millet, wheat ) from Eastern Europe, to the bank accounts of Gilad and Omri Sharon.

Gilad Sharon was paid as a consultant on developing communes in Russia - a service bought by Getex, one of whose owners was Robert Nowikovsky, a businessman with very close ties to Schlaff.

The police investigation uncovered major money transfers from Schlaff's company to Getex. Police said Nowikovsky is also behind a $1 million loan guarantee for Avigdor Lieberman's Yisrael Beiteinu in 1999.

Why would a seed company transfer such enormous sums into the bank accounts of Ariel Sharon's firstborn son? The evidence collected in the long investigation showed that what police see as a suspicious deal was cobbled together by the various interested parties, in an effort to provide an alibi for the transfer of millions.

A Caribbean-based company owned by Kern concluded an agreement with Getex to assist with the communes project. Kern's company, Gebo, hired the services of Charington, a company set up by Gilad Sharon in the Virgin Islands, for what it said was Gilad's know-how and management knowledge. It called him an expert with experience in agriculture.