Police Question King of Diamonds Leviev in Massive Smuggling

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Police Want to Question 'King of Diamonds' Lev Leviev in Massive Smuggling Case

Two of Leviev's relatives and four employees of his companies have been arrested; Leviev diamond company says it obeys the law

Gur Megiddo and Efrat Neuman Nov 05, 2018 7:39 PM Updated: 7:28 AM

Israeli-Russian Lev Leviev businessmen, May 23, 2012.Lucy Young / REX / Shutterstock
Israeli law enforcement officials say they want to question Lev Leviev, the business baron whose companies allegedly are at the center of a vast diamond-smuggling ring that has operated for years.

Among six people the police detained for questioning Monday are two of Leviev’s relatives and four people who are or have been involved in his companies in Israel and Russia. The police have asked a court to extend the detention of the six suspects.

A source close to the Uzbekistan-born Leviev said he might return to Israel voluntarily for questioning.


“This is an investigation that began at the end of March 2018,” a police spokesman said, putting a value on the suspected offenses of $81 million (300 million shekels). “The criminal offenses are attributed to all the suspects in the operation, in the framework of their work with [Leviev diamond company] LLD, with the exception of one suspect.”
Amit Hadad, the lawyer for one of the Leviev relatives, said his client did not work for LLD.

“True, he owns 1 percent of the shares, he was chief executive and was replaced in 2011 by Zvulun Leviev,” the police spokesman said, adding that there was a dispute in the Leviev family.

LLD responded in a statement: “Mr. Leviev and the companies under his control are acting in accordance with the proper norms, while adhering to the law, and we hope that the matter will soon be clarified and the suspicions proved baseless.”

In his decision to extend the suspects’ detention, Judge Guy Avnon wrote: “Let it be said that the suspicion is that hundreds of millions of shekels have been smuggled into Israel over many years, and that I have found documents linking the suspects to the offenses. There are more-senior people and less-senior people involved.”

The arrests followed the arrest of a so-called mule at Ben-Gurion International Airport months ago. That triggered a joint police and customs investigation; the state suspects that for years people working for Leviev took part in a diamond-smuggling operation.

The police and tax authorities suspect crimes including money laundering, the breaching of tax laws, conspiracy to commit a crime, the forging of documents and fraud.

A witness for the state, whose name arose in connection with another corruption case, is helping the police in the investigation, the details of which are under a gag order imposed by Judge Avnon at the Rishon Letzion District Court.

One of the suspects in court, today.
One of the suspects in court, today.Ilan Assayag
Diamonds inside

The investigation began a few months ago when customs officers at Ben-Gurion Airport by Tel Aviv caught a man, associated with Leviev's business group; the man was suspected of trying to smuggle diamonds worth hundreds of thousands of shekels into Israel. He and a person accompanying him tried to pass through the "nothing to declare" path.

The police questioning the two suspects led them to believe that they had uncovered a vast diamond-smuggling business, which had been managed by the state's witness. With his cooperation, an undercover investigation began.

The probe lasted several months and found evidence of methodical diamond smuggling into Israel.

The extent of the smuggling may have reached hundreds of millions of shekels, all within the framework of Leviev's group.

However, as said, the police have arrested his brother. Sources in the diamond industry and in the brothers' social circle claim the two have been fighting for years and have not been in touch during that time. However, the brother could still own shares in Leviev's businesses.

Among the six arrests is the former manager of a diamond polishing plant that Leviev owns in Russia. The others all work or worked for his companies in Russia and in Israel.

The man who broke De Beers

Lev Leviev was born in the Soviet Uzbek Republic and immigrated to Israel at age 14. He became one of the world’s most successful and diversified businessmen. Leviev is most famous for cracking the monopoly over the world’s diamond market held by the De Beers cartel back in the 1980s.

He also invested heavily in construction and real estate, including through publicly traded companies in Israel, in locations ranging from the West Bank to Wall Street. The real estate company most associated with his name was Africa Israel Investments, which he acquired from Bank Leumi, and which wound up in a debt arrangement with creditors. In September, the court approved Africa Israel's takeover by Israeli businessman Moti Ben-Moshe and assured that bondholders would get most of their money – 2.3 billion shekels out of the 3 billion owed to them.

Though a hero to the Chabad ultra-Orthodox movement to which he belongs, including for his expansive philanthropic endeavors, Leviev has been criticized, and his businesses boycotted, over construction projects in West Bank settlements. He has also been dogged by accusations of abuse at gem mines in Angola.

The close relationship between Leviev and Russian president Vladimir Putin has been widely reported.

Leviev had been targeted by multiple inquiries in recent months, but the enforcement authorities say the present the investigation is confined to his diamond business.

Why his group might be involved in smuggling diamonds the first place is unclear. A diamond company's tax is based on sales turnover, not profit. Therefore, there is no tax advertising in smuggling diamonds into Israel unless they were then smuggled back out, and the sale was registered in some third country with lower tax rates (such as Belgium or Dubai).

One reason to smuggle could be that the stones were of dubious origin; either their seller had no license to market them; or they were mined illegally, for instance. In any case, bringing them into Israel without declaring them is illegal.

Eyal Besserglick, lawyer of one of the suspects (who is not kin to Leviev), said he is confident the suspicions will be disproved, and stated that his client has nothing to do with the whole affair. "He worked with the businessman more than six years ago and there is no evidence linking him to criminal activity," Besserglick said.

Another unclear aspect is how this case will affect Israel's diamond industry. On the one hand, Leviev is one of the biggest raw diamond importers in the country; his businesses supply work to dozens of other companies that polish and market the stones through the Ramat Gan Diamond Exchange. These companies employ hundreds of people. If his business hurts, so may dozens more. And this is not a good time for the Israeli diamond business: demand has been tanking and profits are down.

On the other hand, the businessman in question mines the stones partly in Russia, where the name of the game is ties in the Kremlin. In this respect, his business is apparently safe.
https://www.haaretz.com/israel-news/rel ... -1.6618924

[American Dream]

I consider the Dominican Republic to be a Gangsters' Paradise but also Israel, as well as other places.

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Wendy Siegelman
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Here's a brief piece I wrote on financing related to real estate deal Kushner did with Lev Leviev in 2015 - federal prosecutors were looking at the $285 million loan Deutsche Bank made to Kushner a month prior to the election to refinance the deal


Rotem Rosen - who previously ran Lev Leviev's US business for AFI (Africa Israel Investments Ltd) - was a partner in Trump Soho and was married at Mar-a-Lago and attended the Miss Universe contest in Moscow with Trump
https://twitter.com/WendySiegelman/stat ... 1455198208

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Who Is Lev Leviev, the Israeli Billionaire With Ties to Jared Kushner and Putin

Leviev is best known for having cracked the world diamond market monopoly of the De Beers cartel in the 1980s, and for real estate holdings and construction deals from Wall Street to the West Bank

David B. Green Jul 25, 2017 11:06 PM
File photo: Lev Leviev and his wife Olga outside the High Court in London, May 23, 2012.

If the name of Lev Leviev, which has come up in recent reports about the investigations of Jared Kushner’s Russian connections, rings familiar, it’s not without good reason. Leviev, who was born in the Soviet Uzbek Republic, and immigrated to Israel at age 14, has been one of the world’s most successful and diversified businessmen for years. He is best known for having cracked the monopoly over the world’s diamond market held by the De Beers cartel back in the 1980s, and for real estate holdings and construction deals in locations ranging from Wall Street to the West Bank. With the encouragement of the Lubavitcher Rebbe, Menachem Mendel Schneersohn, in the late 1980s, Leviev had the impeccable timing to begin doing business in the Soviet Union shortly before it crumbled, and he took advantage of that political watershed to become a major player in the Wild West that was the Russian economy in the succeeding decades. At the same time, he became a close friend of Vladimir Putin and also a Jewish philanthropist unequaled since the legendary Moses Montefiore.

Unlike Kushner and his father-in-law, President Donald Trump, Leviev was not born to wealth, but apparently from a young age, he possessed a strong urge to attain it. Born on July 30, 1956, in the Uzbeki capital of Tashkent, Leviev grew up in a traditional Bukharian-Jewish family that immigrated to Israel in 1971. Clever rather than studious, Leviev left his Kiryat Malachi yeshiva after just two months, and got a job in a diamond-polishing shop, where, through persistence, he had his senior colleagues teach him all 11 stages of diamond cutting, something a single individual does not generally have the opportunity to master. He was supposedly aided in the delicate art of diamond cutting by early training from his father in ritual circumcision.

Highly ambitious, Leviev began making his way up quickly in the De Beers hierarchy, but that wasn’t good enough. What he really wanted was to break the cartel’s stranglehold on the world’s diamond market. This he did by cutting deals at strategic moments with the governments of both Angola and Russia, both with vast unmined diamond reserves.

Having grown up in the Soviet Union, Leviev was trepidatious about returning to its successor states to do business, but he was encouraged to do just that during a late 1980s visit with the Lubavitcher Rebbe, who also warned him not to forget to help his fellow Jews. Long drawn to Chabad, Leviev then proceeded to become one of its most generous supporters; in a 2007 interview with The New York Times, he did not dispute that he had contributed some $50 million to Chabad educational and welfare institutions across the former Soviet Union.

At the same time, Leviev became the world’s biggest cutter and polisher of diamonds. He accomplished this as successfully as he did, wrote Zev Chafets in that 2007 Times article, in part because of his businesses’ “vertical integration. He mines the diamonds in Angola, Namibia and Russia, cuts and polishes them, ships them and sells them, wholesale and retail.”

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In 1996, Leviev picked up the Africa-Israel holding company, whose fields included real estate and construction, from Bank Leumi when the bank was ordered by a court to divest of its non-financial businesses. The price: $400 million. By 2007, its estimated value was $7 billion. The following year, however, Africa-Israel Investments’ debt was estimated at some $5.5 billion, and it began to shed properties.

Suffice it to say that Leviev has retained control of Africa-Israel, whose holdings today include energy, steel production, hotels, and a number of fashion designers. Along the way, he has been criticized, and his businesses boycotted, attacked for massive construction projects in several different West Bank settlements; his bid a decade ago to become the operator of Israel’s first privately owned prison was stymied by the Supreme Court; and he has been dogged by accusations of the worst types of abuse at his mines in Angola.

This week’s news stories don’t link Leviev with specific accusations; rather, they indicate a number of business and social relationships that connect him to Vladimir Putin and Kremlin-related businesses, as well as to the Trump Organization. Leviev was a business partner of Prevezon Holdings, the Russian firm that was accused of money-laundering, and that, after it was represented by Natalia Veselnitskaya, got off with a $6 million slap on the wrist. The Prevezon scam had been exposed in 2009 by Russian whistleblower accountant Sergei Magnitsky, who a short time later died in a Moscow prison under suspicious conditions. It was his death that led to the American passage of the sanctions – in the form of the Magnitsky Act – that Veselnitskaya said she was lobbying to have cancelled when she met with Donald Trump, Jr., Jared Kushner and others at Trump Tower last summer. It was to avenge the Magnitsky sanctions that Putin in 2012 abruptly prohibited American citizens from adopting any more children from Russia; readers will remember that Trump has said that “adoptions” was the subject of his off-the-record second conversation with Putin at the G-20 meeting in Hamburg two weeks ago. Now, the Justice Department’s decision to settle with Prevezon last May is likely to come under renewed scrutiny by investigators in the U.S.

The Guardian this week reported on several joint business ventures that Prevezon undertook with Leviev’s Africa-Israel Investments, both in the U.S. and Europe, and which were later alleged to be vehicles for money-laundering by Prevezon.

In 2015, the Kushner real-estate company purchased four floors of the old New York Times building, on West 43rd St., for $295 million. The seller was Lev Leviev’s U.S. branch of Africa-Israel Investments, in partnership with Five Mile Capital. According to the Washington Post, Kushner took a loan from Deutsche Bank in October 2016 – a month before Election Day – to refinance the Manhattan property, which was now valued at $74 million above what he paid for it a year earlier.

Deutsche Bank has been of interest to a variety of different federal investigators for its involvement in a Russian money-laundering scheme, and it settled at least one related case with the U.S. Federal Reserve two months ago.
https://www.haaretz.com/us-news/who-is- ... -1.5435007