3 arrested in Israel investigation into crypto scheme that defrauded the French government
Israeli police arrested three people on Monday morning, suspected of running a money laundering service on behalf of criminals in France who defrauded the French government of millions of euros.
The suspects are believed to have used various cryptocurrencies to launder the money, then return it as apparently “clean money” to the French fraudsters, police said.
It remains unclear exactly how the alleged money launderers in Israel were remunerated for their services.
Several other suspects were detained for questioning regarding the scheme.
French police began their investigations last year, and Israeli authorities opened their own undercover investigation earlier this year.
The Israeli investigation is being carried out by the Lahav 433 special crime unit and the Yahalom investigative unit of the Israel Tax Authority, in cooperation with the French police and the European Union Agency for Law Enforcement Cooperation (Europol), assisted by the cybercrime division and internationally. the criminal department at the State Attorney’s Office.
Lahav 433 police unit headquarters in the city of Lod, November 4, 2019. (Flash90)
According to the police, fraudsters in France took advantage of compensation offered by the French government to businesses adversely affected by the COVID-19 pandemic and subsequent shutdowns in 2020 and 2021.
These criminal elements established fictitious businesses and were able to apply for and receive the COVID-19 compensation payments, since the French government disbursed these funds quickly and with insufficient oversight, to immediately help business owners suffering financially, given the severe economic downturn in the aftermath of the pandemic.
The fraudsters then used the money laundering services of the suspects who have now been arrested in Israel.
The suspects allegedly used these illegally received funds to purchase cryptocurrency and then converted these funds into different cryptocurrencies to hide the original source of the money.
Finally, the funds were exchanged back into traditional currency and returned to the fraudsters, who had commissioned the money laundering service.
The police have declined to explain the exact mechanism for laundering cryptocurrencies, but have said that further details will be provided in the coming weeks.
