Police in Israel have detained three suspects who allegedly laundered millions of euros stolen from the French treasury through cryptocurrency transactions. The money came from government grants for businesses affected by the Covid-19 pandemic.
Israeli Law Enforcement Busts Money-Laundering Ring Using Coins to Clean Money for French Fraudsters
Three people have been arrested in Israel this week on suspicion of providing money-laundering services to criminals who defrauded the French state. The operation follows a covert investigation carried out by Lahav 433, Israel’s special crime-fighting unit, the English-language online newspaper Times of Israel and major local media reported.
According to the publications, the authorities believe the detained persons have used various cryptocurrencies to launder millions of euros, which were then returned to the French clients, for which the Israelis were remunerated. Several other suspects have also been questioned as part of the efforts to unravel the scheme.
Besides Lahav 433, the Yahalom investigative unit of the Israel Tax Authority and the cybercrime and international crime departments of the State Attorney’s Office also took part in these efforts. The Israel Police were collaborating closely with their French counterparts and the European Union Agency for Law Enforcement Cooperation (Europol) as well, the reports detail.
While the Israelis started working on the case earlier in 2022, the French launched their investigation last year. The fraudsters in France exploited the government program to support entities impacted by the negative effects of the Covid-19 pandemic in 2020 and 2021, when the European economy was hit by lockdowns.
The French organizers of the theft established fictitious companies and managed to apply and receive compensation payments granted by the government. Paris wanted to quickly distribute the funds to provide immediate assistance to businesses that were suffering financially and implemented insufficient oversight.
They then employed the money-laundering services of the arrested Israelis who bought cryptocurrency with the money and exchanged it through multiple coins to obscure the original source of the funds before eventually buying fiat currency again. Police officials declined to comprehensively explain how the system worked, but promised to provide more details soon.