Officers from Israel Police Central Region Fraud Unit and Israel Tax Authority investigators have arrested the director of Chabad Youth Organization in Israel, Rabbi Yosef Yitzchak Ahronov, the nonprofit organization's (NPO) accountant, and one of its authorized signatories, on suspicion of embezzlement amounting to tens of millions shekels and tax fraud running into hundreds of millions of shekels. The four men are suspected of theft, fraudulent receiving, and money laundering, in which leading businessmen are also thought to be involved.
Ahronov was arrested this morning on return from a fund raising campaign abroad, as detectives raided the NPO's offices in Kfar Chabad. At web posting, the four men were due to appear at the Ramla Magistrates Court for a remand hearing.
Police began an undercover inquiry into Chabad Youth Organization following a complaint by the Registrar of Nonprofit Organizations about irregularities in the NPO's management. The inquiry revealed that funds intended as donations were transferred to private accounts held by the director and others. It was also discovered that receipts issued for donations were not entered on the NPO's books.
Adv. Gideon Fisher, the lawyer representing Ahronov and Lubavitch-Chabad, said the investigators were trying to blame the NPO's officers for fraud that they themselves had uncovered. "The inquiry began following a lawsuit the NPO filed against its former treasurer, in which it claimed he embezzled more than NIS 30 million. In his defense, the treasurer sought to divert attention from his own actions by making absurd claims in an attempt to smear the NPO's director and Chabad leaders."
Published by Globes [online], Israel business news - www.globes.co.il - on November 14, 2007
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