Recently, three people were detained in Israel 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.
According to the English-language online newspaper, Times of Israel, 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.
In addition to Lahav 433 and the Israel Tax Authority, the State Attorney’s Office’s cybercrime and international criminal sections also participated in these investigations. According to the sources, the Israel Police worked closely with their French counterparts and the European Union Agency for Law Enforcement Cooperation (Europol).
The French started their probe last year, while the Israelis began working on the case earlier in 2022. The fraudsters in France took advantage of the government program to assist organizations affected by the Covid-19 pandemic’s negative effects in 2020 and 2021 when the European economy was damaged by lockdowns.
The French criminals were able to apply for and obtain government-approved reparation payments by creating phony companies. Paris sought to disburse the money as soon as possible to help enterprises that were struggling financially and had insufficient control.
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 have so far declined to comprehensively explain how the system worked but said that they would provide more details soon.