Israeli broker held for massive embezzlement

Hanan Abramovich, Israeli diamond broker was reportedly arrested on 19th April 2016 over cash and diamonds he allegedly owes to traders and members of the Israel Diamond Exchange, located in the central city of Ramat Gan. The fraud unit of the Tel Aviv Region police is investigating the case, Channel 2 news reported. Abramovich was being brought to court for a remand hearing on 20th April 2016 and some members of his family were to be questioned.

Abramovich is alleged to have taken goods worth $60 million-$65 million from 12 leading diamond companies without paying for them or giving them back. Due to the enormous amounts involved, there is a concern that some of the companies will be forced into bankruptcy, the TV report said.

“We are talking about huge deception by a man who planned it a long time in advance,” said Eli Avidar, managing director of the Israel Diamond Exchange. “He took advantage of the ethical code of the exchange members.”

“Hanan Abramovich is a swindler and happily there aren’t many like him,” Avidar continued. “It is the first time in our history there was embezzlement on this scale. You can’t make a phenomenal sum of tens of millions of dollars disappear without leaving a trace. We are sure the man hid diamonds and cash, and the police will find them quickly and easily.”

Avidar said suspicions of embezzlement were first raised a few months ago when Abramovich failed to make certain payments.

“We weren’t aware of it but creditors opened a dialogue with him and he strung them along for seven months,” he explained. “When he didn’t arrive yesterday for arbitration meetings it became clear that it was a matter of embezzlement.”

Avidar noted the rigorous process involved in becoming a member of the exchange, which requires candidates to work in the diamond business for eight years and pass several lie detector tests as well as background reviews to ensure there is no history of embezzlement or theft. “Whoever doesn’t pass the polygraph can’t be accepted as a member of the exchange.”

The exchange’s administration has reportedly begun checking Abramovich’s dealings after a complaint was filed against the company he owns, which was said to owe payments for tens of millions of dollars to traders.

After a number of internal arbitration meetings, the complaint was handed over to the exchange’s legal department, which then asked police to open a criminal investigation. Printed sheets posted on walls in the exchange featuring a photo of Abramovich urged “anyone who owes money and/or traders to exchange member Mr Hanan Abramovich or anyone whom the aforementioned owes money and/or traders is requested to immediately notify the legal department.”

The posters also said that Abramovich had been banned from the exchange trading floor for 14 days until the management further reviews the matter.

Abramovich’s legal representative attorney Adi Carmeli told Channel 2: “My client acted within the framework of regular business practices and denies any connection to illegal activities. A simple investigation will validate this.”

Source: The Times of Israel