The Ramla branch of Mercantile Discount Bank was closed today on suspicion of money laundering by customers who allegedly deposited checks totaling tens of millions of shekels in fictitious accounts with the collaboration of senior bank officers.
Mercantile Discount Bank Ramla branch manager Yossi Zar, deputy branch manager Yitzhak Marciano, and a third employee have been arrested on suspicion of helping criminals launder millions of shekels. 23 people suspected of laundering money at the bank branch have also been arrested. Israel Police raided the branch and seized files and documents.
During the three-month investigation, the police planted concealed cameras in the branch with the consent of Mercantile Discount Bank’s management. The police claim that during the investigation, the deputy branch manager was documented depositing thousands of checks of up to NIS 50,000 each in the fictitious accounts. NIS 50,000 is the threshold amount requiring a report to the Israel Tax Authority. The police suspect that most of the money deposited originated in extortion, protection money and illegal gambling.
Mercantile Discount Bank said in response, “We trust the police to do its job properly. The bank branch’s customers will not be affected, and they can continue using direct banking services or contact back-up branches in Or Yehuda and Rishon LeZion. To the best of our knowledge, the branch will be open for business as usual tomorrow.”
Banking sources believe that Mercantile Discount Bank will have to pay a large administrative fine. Another Israel Discount Bank (TASE: DSCT) subsidiary, Israel Discount Bank of New York, recently paid a $25 million fine to the US authorities for money laundering at the bank.
Published by Globes [online], Israel business news - www.globes.co.il - on March 7, 2006