3 Arrested in Israel for Crypto Money Laundering Scheme

Three suspects were detained by the police in Israel over allegations of laundering millions of euros they had stolen in cryptocurrency transactions from the French treasury.

The money had been stolen from the grants issued by the French government for supporting businesses that had been affected by the COVID-19 pandemic.

Money laundering services

This week, Israel arrested three people over suspicion of offering criminals money laundering services, who had been involved in defrauding the French government.

This operation comes after the special crime-fighting unit in Israel called Lahav 33 conducted a covert investigation into the matter.

According to reports, the authorities detained the three individuals because they believe they utilized different digital currencies for laundering millions of euros.

The funds had then been returned to the French clients and the Israelis who had laundered the money had received their remuneration for their services.

In order to unravel this money laundering scheme, the authorities in Israel also questioned a number of other suspects.

The authorities

It should be noted that Lahav 33 was not the only unit involved in the investigation. The Israel Tax Authority’s Yahalom investigative unit also participated.

Apart from that, efforts were also made by the State Attorney’s Office’s various departments related to international crime and cybercrime.

Moreover, the Israel Police also collaborated closely with the French authorities in the investigation. The report said that they had all worked with the European Union Agency for Law Enforcement Cooperation (Europol).

The Israelis had begun working on the case in question in the start of the year, but the French authorities had been investigating the matter since the previous year.

The French government had launched a program for providing support to businesses that had suffered from the negative impacts of COVID-19 in 2020 as well as 2021.

This was when the European economy had been subjected to a number of lockdowns that had seen business activity come to a halt.

These government programs launched for supporting entities were exploited by the fraudsters.

The incidents

Fictitious companies had been set up by the organizers of the theft in France and they had managed to apply for these government programs and also received compensation payments from the government.

Paris had been distributing the funds to businesses quickly at that time because they wanted to offer immediate assistance to entities who were dealing with financial hardships.

Therefore, there was not sufficient oversight in terms of the payments made. This is what the fraudsters took advantage of and then sought money laundering services of the three Israelis who were arrested.

These individuals used the grant money to buy cryptocurrencies and obscured the original source of funds by exchanging it with multiple coins.

Eventually, they bought fiat currency again, once they were sure that they had covered their tracks and the original source of the funds could not be identified.

Police officials did not provide details about how their system worked, but did say that they would share some more information soon.