Police Bust Gang Suspected Of Defrauding Israeli, PA and Gaza Authorities

Illustrative photo of 200 New Israeli Shekel bills, February 7, 2016. (Nati Shohat/Flash90)
Illustrative photo of 200 New Israeli Shekel bills, February 7, 2016. (Nati Shohat/Flash90)

Israeli authorities on Monday arrested members of what they said was a criminal gang operating in Israel, the West Bank and the Gaza Strip, suspected of defrauding of all three government authorities as part of a mass credit card scam.

Four suspects were arrested in the early hours of the morning, the initial police said, and six more were detained — meaning they could be held for up to three hours with a possible three-hour extension.

They are alleged to have been part of a fraud scheme that yielded tens of millions of shekels (millions of dollars) by setting up a service ostensibly for paying customers’ monthly bills. Police said they were suspected of crimes including fraud, money laundering and tax offenses.

According to the statement, the group, which includes “criminal elements” in Israel and in territories governed by the Palestinians, including the Palestinian Authority, advertised its services via social media and promised to pay electricity bills, municipal taxes and other recurring charges at a discounted rate.

But it made use of a software which is commonly used in Israel and internationally for payments using stolen credit cards, collecting a commission of about 50 percent of each payment.

In their statement, police warned the public not to pay for services that promise to pay their bills with a discounted rate, saying that in addition to it being a criminal offense, “there is a danger that the money will end up in the hands of terror elements.”

It added that in many of the cases, when authorities or credit card companies discovered the fraud, the payments were retroactively canceled and the customers had to make the payments once again at the full original rate.

The investigation by the Lahav 433 anti-corruption police unit had been covert, and became public as the arrests were made.

The suspects will be brought later Monday before a judge at the Rishon Lezion Magistrate’s Court.