Sources inform “Globes” that US authorities froze a number of accounts of Israeli banks at JP Morgan Chase (NYSE:JPM) in New York last week.
The frozen accounts included two large accounts of United Mizrahi Bank, with a balance of $1.2 million; an Israeli Discount Bank account with $700,000; a Bank Hapoalim account with $100,000; and smaller accounts belonging to Bank Leumi, Union Bank of Israel, and Investec Israel, each with a few thousand dollars.
The reason cited for the measure was suspicion of fraud carried out through these accounts. The suspects allegedly told individuals they had won the lottery. In order to collect their winnings and pay the tax on them, the individuals had to give their bank account numbers to the suspects. The suspects allegedly credited the banks’ accounts using bank checks from the victims.
Accounts of Israeli banks were among those defrauded. The Israeli banks were allegedly involved in clearing the victims’ bank checks for the suspects. As part of their investigation, the US authorities froze the banks’ accounts at JP Morgan Chase used in the fraud.
US laws against money laundering permits the freezing of bank accounts. The Israeli banks were notified last week that their accounts were being frozen.
Published by Globes [online] - www.globes.co.il - on November 6, 2002