Organized Crime behind the Surge in Financial Crimes in Israel

According to the Israel Money Laundering and Terror Financing Prohibition Authority, which falls under the remit of Justice Ministry, in 2021 there was a substantial rise in the number of financial crimes linked to organized crime and terrorism.

According to the Authority’s estimates, organized crime’s proportion of all financial crimes increased from 6.8% in 2020 to 19% in 2021. Terror financing, on the other hand, increased from 9% in 2020 to 14.6% in 2021 as a proportion of financial crimes in Israel.

In 2021, fraud, deceit, and counterfeiting made up 23% of financial crime, with tax offences (11.2%), bribery and corruption (8.7%), and the drug trade (4%) making up the other important subsets of this type of crime.
Numerous methods were used to commit these crimes, but the three that stood out the most were the supply of criminal financial services (12.3%), cash payments (12.8%), and foreign financial transactions (18.7%).

Black Market Loans and Money Laundering

The report detailed a number of investigations by the authority into various aspects of financial crime throughout 2021, including one extensive investigation against an organized crime gang that was conducted both domestically and abroad.

In recent years, organized crime in Israel has significantly worsened. Due to the lack of access to financial institutions for many Arab Israelis, criminal organizations have stepped in to provide black market loans and other services to Arab residents, raising money for these organizations and fostering their rise to power and rising violence.

The plan entailed tricking internet investors by promising them significant profits on a variety of financial instruments, including binary options, forex, and cryptocurrency. However, the investors were duped, and the funds they put into these properties were given to the criminals directly.

The money laundering authority assisted in identifying those responsible for this fraudulent investment scheme and the ways that the money was laundered. This information was passed on to the Israel Police, the Tax Authority, and the State Attorney’s Office, to take action against those accused of perpetuating the crime.

The strategies used by the criminals involved creating an intricate web of businesses and affiliates in offshore financial hubs and setting bank accounts to receive the funds, most frequently in the nations of the scheme’s victims.

The Israeli Authorities are ramping up to fight organized crime

Attorney Ilit Ostrovitz-Levi, the authority’s head, explained that the organization’s intelligence gathering and evaluation efforts had significantly improved over the previous year in order to advance the fight against financial crime, which harms the security of the citizens of the State of Israel.

The authority is “an important element in our efforts to expose criminals and to locate the assets and money routes they use,” said Justice Minister Gideon Sa’ar, noting that criminal behaviour is growing increasingly complex.

According to him, this is crucial in the national fight against organized crime in Israel, which is being carried out in accordance with the government’s five-year plan to address the issue.

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