This is an incredible story that demonstrates how far Israel’s former secret security services chiefs are prepared to go in pursuit of money. The plot involves former Shin Bet chief Jacob Perry, who used a trustee for a businessman, who turned out to be former Mossad head Danny Yatom, in a big-money arms deal between Bulgaria and Congo. The aim of the deal was solely to help a prominent Israeli businessman sting the Bulgarians, in exchange for a fat commission.
Sources have told "Globes" about this remarkable story involving Perry and his business partner Zvika Naveh in CGI Group, which specializes in business intelligence. Yatom and his son Nir, who were involved in covert training of combat Congalese soldiers were also involved in the affair together with tycoon Gad Zeevi, who in the pinnacle of his career amassed wealth estimated in the billions of shekels.
The start: The acquisition of a Bulgarian airline that went wrong
The affair began back in 1979 when Zeevi acquired, together with partners, shares in the Bulgarian national airline. The deal did not go well and the parties blamed each other. Fifteen years ago, international arbitrators ruled that the Bulgarian government should pay Zeevi $10 million compensation, but the Bulgarian government did not comply with the ruling. Zeevi tried in various ways to get his money, and in 2007 the Jerusalem District Court put a lien on Bulgarian assets to grant Zeevi access to the funds owed to him. Due to the political sensitivity and fear of a diplomatic crisis, then Attorney General Meni Mazuz intervened in the proceedings, calling for the liens to be removed.
Eventually, the Supreme Court partially accepted Mazuz’s position and removed the liens on the Bulgarian Embassy's vehicles and bank accounts. Zeevi, who continued seeking creative ways to recoup the millions that Bulgaria owed him, turned several years ago to CGI Group to help him recover the money.
CGI Group’s Perry and Naveh proposed an imaginative plan to Zeevi. The Republic of the Congo in Africa would order $60 million of Soviet-made weapons, including rifles and pistols, from the Bulgarian government. After Bulgaria had sent the arms, and the Congolese had begun payment, Zeevi would seize the money deposited in trust through an intermediary, which was supposed to be paid by the Congo to Bulgaria, claiming that the Bulgarian government owed him over $10 million, plus the major amount of interest that had accrued.
Congo: The fictitious arms deal takes shape
In February 2019, Zeevi and CGI signed a memorandum of understanding (MoU), in which CGI stated that it had the option of implementing the purchase of military equipment by the Congolese from the Bulgarian government. It's not entirely clear how CGI could do this. In the past it has been reported that CEO Zvika Naveh was considered an associate of billionaire Dan Gertler, whose relations with the Congolese authorities and his dealings there had caused turmoil in the past. According to previous publications, Naveh had even written a deposition for Gertler as part of the arbitration that Gertler was conducting against British billionaires, the Gertner brothers.
Either way, CGI undertook that the letter ordering the equipment for the Congo would be signed by the country’s then president. The MoU between Zeevi and Perry and Naveh, said that Congo's letter of invitation would be addressed to "D", but nowhere in the MoU was there any clue as to who "D," supposed to be the trustee, and the "middle man," actually was. Congo, according to the MoU, was supposed to pay the proceeds for the purchase of the equipment to an escrow account of the mysterious "D", to be opened by an Israeli lawyer in an Israeli bank. When the amount was transferred to "D's" trust account, the plan was that Zeevi would file a seizure request in Israel, and the money would be seized by him, and Jacob Perry's CGI Group would receive 15% of the net amount received from Zeevi Holdings, not including hundreds of thousands of shekels in advance fees to be paid by Zeevi.
The day after the signing of the MoU between Zeevi, and Peri and Naveh, Zeevi told Naveh that "D" was former Mossad chief Danny Yatom. Thus former Shin Bet head Jacob Perry had concocted an arms deal between two countries, with the aim of "stinging" one of them, a NATO and EU member, through Zeevi’s trustee, former Mossad chief Danny Yatom. It is not difficult to imagine the political entanglement in which Israel would have found itself, if the sting operation had ended successfully. In practice, the Congolese letter of invitation was not signed, not sent, and the transaction failed. But that's not the end of the story.
The failure of the plan: The struggle for NIS 15 million compensation
Due to the failure to implement the plan, Zeevi demanded the hundreds of thousands of shekels he paid as an advance. CGI, for its part, claimed in response that Zeevi's representative, Danny Yatom, is responsible through his negligence for the Congolese withdrawing from their plans to promote the deal, and for that reason Zeevi must pay them NIS 15 million compensation.
The dispute escalated, and lawyers warning letters were sent between the parties. Zeevi was represented by Erdinast, Ben Nathan, Toledano & Co. and CGI was presented by the Navot Tel-Zur. Zeevi claimed that CGI misled him, and that in fact it did nothing to advance the complicated deal. Zeevi charged that it was not really possible for CGI to promote the deal between the countries. He further claimed that the right to keep the advance payment depended on the final result, and since the deal ultimately did not work out and the $10 million did not reach Zeevi's hands - CGI must return to him the hundreds of thousands of shekels paid to the company as an advance. Zeevi threatened that if the advance payments were not returned, he would reserve the right to go to court, and sue for this amount and for the damages he suffered as a result of CGI's failure to fulfill its alleged obligation.
Adv. Navot Tel-Zur responded on behalf of CGI that it was Zeevi who was responsible for the failure, by bringing Yatom and his son Nir into the picture, who operated through an unknown company called Dantovb Ltd. According to CGI, Yatom and his son acted behind their backs by contacting government officials in the Congo, and took various steps there which directly harmed the advanced contacts conducted by Perry and Naveh for the implementation of the deal. According to Tel-Zur, there is documentation and evidence of this.
It was further claimed by Tel-Zur, that Perry and Naveh warned Zeevi back in December 2019 that Yatom's "stirring" jeopardizes the deal. At the meeting, according to Tel-Zur, Zeevi took responsibility for the matter and pledged that Yatom and his son would immediately end involvement in the matter. Tel-Zur added that Yatom’s interference damaged Perry and Naveh’s reputation in the eyes of the Congolese.
Tel-Zur concluded that due to the mess up by Zeevi's straw man, Zeevi should compensate CGI with the amount that the company was supposed to earn for its share in the deal: $6 million (about NIS 20 million), but CGI would compromise and accept NIS 15 million. Tel Tzur threatened that if his demand was not met, CGI would sue in the Tel Aviv District Court.
In the end: Both sides decided to forego the money
In practice, it seems Zeevi waived his right to receive hundreds of thousands of shekels, the advance fees that were paid. CGI also waived its right to receive the $6 million that Perry and Naveh were supposed to pocket, if the sting had been successful. The mutual legal claims were never filed in court.
Both Zeevi who had employed former Mossad chief Danny Yatom, and former Shin Bet head Jacob Perry and his partner Zvika Naveh understood that such deals could never be debated by the courts.
Danny Yatom told "Globes," "I don’t want to relate to the matter, I’ll just say that nothing came of it." When asked about whether he and his son trained Congolese soldiers, he said, "I don’t want to talk about my business activities."
CGI Group CEO Tzvika Naveh said, "We don’t talk to the media about our clients and/or our activities in Israel and around the world. We stress that CGI Group is supported by legal counsel in every country that it works to ensure that activities comply with local law."
Gad Zeevi responded. "Nothing. You won’t receive any comment."
Published by Globes, Israel business news - en.globes.co.il - on October 21, 2022.
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