Marvin Berkowitz accused of posing as federal prisoners and sending false tax return claims.
By YAAKOV LAPPINmarvin tax scam 248 88(photo credit: Channel 10)
Police arrested a 62-year-old US citizen in Jerusalem on Monday and seven alleged accomplices following a four-month-long undercover investigation into a massive fraud and money-laundering operation, which is being dubbed "the American pie affair" by investigators.
According to suspicions, Marvin Berkowitz obtained the details of US federal prisoners and impersonated them in letters he sent to American financial authorities. The letters contained fictitious tax return claims.
He pocketed "at least $12 million in this way," said police representative Supt. Ohad Ganis on Monday, during a remand hearing held at the Tel Aviv Magistrate's Court.
"The suspect lived in the shadows and went underground since arriving in Israel at the start of 2003. He expressed surprise that we got to him," Ganis said. The National Fraud Unit launched the investigation after being contacted by the US Department of the Treasury, he added.
Israel has not received a request from the US to extradite Berkowitz, and he can be indicted and tried in Israel for crimes committed on Israeli territory, Ganis said.
Berkowitz maintained a stony expression during the proceedings, though he occasionally glanced around the courtroom with a look of astonishment.
Police maintain he proceeded to launder the millions of dollars he obtained fraudulently by investing in a series of real estate deals in Israel.
According to suspicions, on one occasion, Berkowitz turned to one young American-Israeli real estate agent and hired him to locate apartments to buy, renovate and resell.
The agent, who cannot be named, was also arrested on Wednesday, though his lawyer, Menashe Salomon, argued that his client had no idea of the illegal source of Berkowitz's cash.
Judge Daniel Bari examined a secret report submitted by police containing the case material, and concluded "there is a basis" to suspect Berkowitz of "fraudulent receipt of goods, forgery, use of forged documents and money-laundering offences." Bari rejected the police's request to keep Berkowitz in custody for 15 days, extending his custody by a week instead.
Chaotic scenes erupted in the courtroom at the start of the hearing, when police objected to an attempt by an attorney, Larry Dub, to represent Berkowitz. Police said Dub had represented Berkowitz in a number of property sales in the past, and that "he might be questioned in the investigation later."
A second lawyer, Reuven Berkovitcz, was appointed instead as the suspect's legal counsel. Following the session, Dub told The Jerusalem Post, "This is part of a witch-hunt against the Jewish community being waged by American law enforcement, at the behest of the Obama administration."
He added, "The Jewish community is being persecuted, and this is one of many episodes. It's just another example of them making a big shtick over nothing. Where was the US government between 2003 and 2009? You would think they would have requested an extradition during that time."
The suspect's attorney, Berkovitcz, said, "We have not yet formulated a line of defense."
He admitted he was not well acquainted with the charges against his client, but added that he doubted the strength of the police's case.
A kippa-clad American-Israeli suspect, named as Ephraim Franklin Novak, was released to house arrest. Novak's attorney, Adowa Weizman, said her client suffered from health problems.
Three additional suspects, named as Anton Walker, Igor Zimmerman and Tigran Agizrian, accused by police of assisting Berkowitz's money-laundering schemes, were remanded in custody for six days.
Lawyers for the three men tried to cast doubt on their clients' complicity in Berkowitz's alleged activities. "The money, the 12 million… are you able to link this money to my client?" asked Fadi Hamdan, an attorney representing Zimmerman.
"The things I am able to link to this suspect - and all suspects - are detailed in the secret report which is before the court," responded the police representative.
"Is it true that my client took out a loan of NIS 350,000 to buy a 2009 BMW?" Hamdan continued.
Supt. Ganis again referred to the secret report. During a remand hearing police are not obligated to prove the suspect's guilt, but must establish a reasonable suspicion to justify their continued custody as the investigation continues. Judge Bari cast doubt on the complicity of the real estate agent who cannot be named, ruling that he be kept in custody for two days, and calling on police "to check" their case against him thoroughly.
