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Hundreds of Israelis Exposed in Sprawling #PanamaPapers Financial Scandal

Some 600 Israeli companies and 850 Israeli shareholders are listed in the leaked documents of Panamanian law firm Mossack Fonseca, a leader in creating shell companies that often serve to conceal ownership of assets.

The leaked files, which were obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with Haaretz and other media organizations, provide a glimpse of the economy that until now had been hidden from the Israeli public.

There is a number of prominent names among the shareholders. It is important to note that as long as holdings in the companies and their revenues — if any — are reported as required to Israeli tax authorities, owning the company is not against the law.

Mossack Fonseca’s branch in Israel is headed by attorney Amir Maor. Callers to the branch are informed by a voicemail message that they have reached the offices of “The Company for Establishing Companies.”

Reached by telephone, Maor stated that Mossack Fonseca informed its Israeli branch last week that files had been stolen after its computer systems were breached. “Any information you use [from these files] is like using stolen data,” he said, refusing to give further comment.

The leaked files mention Sapir Holdings, a company registered in 2002 in the Virgin Islands. The owner and its only director was top-ranking lawyer Jacob Weinroth. He was indicted for money laundering in late 2009 and acquitted two years later of all charges against him. During the trial, it emerged that the company had received 30 million shekels ($7.95 million) for services rendered from Uzbek-Israeli entrepreneur Michael Cherney and Russian-Israeli businessman Arcady Gaydamak.

The fraudulent real estate deal of 2002 with the Greek Orthodox Patriarchate was also brought up in the trail. The failed deal, in which expensive lands in Jerusalem were offered to the State of Israel for a 999-year lease, was intended to be carried out by Christian Lands of Israel, a company created by Mossack Fonseca, which Weinroth represented. Company documents, like those requesting power of attorney for Weinroth, are among those found in the leaked files.

Another top Israeli lawyer who appears in the Mossack Fonseca documents is Dov Weisglass, who was also Prime Minister Ariel Sharon’s bureau chief. Weisglass’s business partner, attorney Assaf Halkin, registered four companies through the Panamanian legal firm. Weisglass was the sole owner of one of these companies, Talaville Global, which was registered in the British Virgin Islands in May 2012. Its declared goal, according to the company’s registration form, was promoting real estate deals in Eastern Europe. Seven months later, all of Talaville Global’s shares were mortgaged against a loan from Vienna-based Raiffeisen Bank.

In response to a Haaretz inquiry, Weisglass and Halkin explained that the company “was registered for the purpose of receiving a loan from the bank in order to invest in European properties. The bank would only allow a loan to a corporation. They added that the “company activity is reported to the tax authorities in Israel. The required tax on the said activity is paid in Israel.”

Another business that Halkin established abroad is GFI Technologies. It was registered in May 2013 in the island of Anguilla in order to invest in Albanian high-tech companies. According to records, Halkin, an Albanian citizen named Ismail Mulati and a Canadian firm called Global Fluids International S.A. are the company’s owners. Halkin did not respond to an inquiry by Haaretz regarding what kinds of investments the company made, if any, but commented that the goal of the company is “selling fuel technology.” He added that “all of the Israeli shareholders’ revenue is reported to Israeli tax authorities.”

Although most of the Israeli public is unfamiliar with his name, one of the prominent Israeli businessmen appearing in the leaked documents is Jacob Engel. He is primarily active in African mining through the Elenilto and Engelinvest Groups. Last year TheMarker reported that Elenilto won the government of Togo’s international tender for constructing and developing a phosphate mine and fertilizer factory that would cost $1.4 billion. Elenilto won a huge tender in 2010 for an iron ore mine in Liberia, but sold the concession after a year and a-half to India’s Sesa Goa company for $90 million.

The Engelinvest Group registered five companies through Mossack Fonseca. Engel, or companies he owns, directly controls some of them. However, the connection is more blurred with some of the companies. For example, in 2012 Engelinvest registered a company called TDNN in Anguilla, whose only owner and director was Col. (res.) Olivier Rapowitz. The company’s declared goal was mining activity in the Democratic Republic of Congo. Rapowitz, who in recent years served as an emissary of the Jewish National Fund in Belgium, refused to respond to a Haaretz inquiry on the matter.

Another company registered by Engelinvest in Anguilla is Irisgianman. Besides the registration itself, it is hard to identify the connection between the subsidiary and the parent company. The goal of the new company, which was established in October 2011, is mining activity in Ethiopia. Its shareholders, according to the registration documents, are two Israelis, one named Iris Levenstein and the other identified as Y., and Valona Giancarlo, an Italian national residing in Addis Ababa.

Levenstein told Haaretz that although she is registered as a shareholder, she has nothing to do with the activities of the company. “The shares are registered in my name, but they are not mine,” she said. “They are held by Y.” In response to a Haaretz inquiry, Levenstein added that the shares are registered for “historic reasons,” but did not elucidate further. Haaretz was unable to locate Y. before press time, and Jacob Engel refused to comment.

Israeli businessman Idan Ofer is also mentioned in connection to some of the companies in the documents. In 2008 he was appointed the sole director and shareholder of a company called Golden Glade Properties Ltd, which was established in the British Virgin Islands. The name of the company was later changed to Golden Aviation, and Ofer was replaced by John Frank Megginson and David Upton Tugman as co-directors and president and vice president, respectively.

According to the documents, Ofer’s shares were transferred in 2013 to Peymas Enterprises, a company which signed a mortgage to purchase a plane with JP Morgan Bank. In addition, Ofer was registered as owner and director of Joleam Ltd, which was registered in 2009 in the British Virgin Islands, as well as Compass Aviation Ltd, which was also registered there in 2008.

Udi Angel, Ofer’s business partner and shareholder in Israel Corp., one of Israel’s largest holding companies, is registered as company director. Ofer’s spokesperson did not respond to questions about his holdings in these companies, nor about their operations.

There are many correspondences linking Bank Leumi to the Panama-based law firm. Most of them discuss Bank Leumi’s branch in Jersey in the Channel Islands, which provides a tax shelter to its customers. This is the same island on which Prime Minister Benjamin Netanyahu had a bank account with the local branch of The Royal Bank of Scotland. There are also messages to clerks in various Israeli banks who manage their clients’ affairs in tax shelters or keep in touch with Israeli lawyers who represent them. Last October, Bank Leumi announced that it was closing the Jersey branch.

Bank Leumi is in a vulnerable position on the subject of international taxation after being investigated by U.S. tax authorities last December. The bank was forced to pay a 1.5 billion shekel fine for assisting American clients in income tax evasion. The investigation was not connected to the bank’s Jersey branch.

One of the Israeli customers of Leumi’s Jersey branch is billionaire Teddy Sagi, who made his fortune developing online gambling technology in England and other places worldwide. Sagi lives between Israel and England. In recent years he has developed Camden Market as a commercial real estate space. Sagi is registered as the sole shareholder of at least 16 offshore companies established through Mossack Fonseca, most of which deal with real estate.

Bank Leumi’s Jersey branch provides services to a number of these companies. Documents reveal that some of the branch’s officers also serve on the board of directors of some of Sagi’s offshore companies.

Darren Toudic and Chris Lees are both defined, according to emails, as board members of Bank Leumi’s Jersey branch. Lees is also on the board of directors of Meadow Property. Toudic serves on the board of the Camden Market Holding Corporation, which, based on its name, one can assume is connected to the Camden project.

Another correspondence related to the branch describes social and business meetings between people from Mossack Fonseca and bank representatives. During golf games or barbecues, they discussed the bank’s deals with the Panamanian law firm. Associates of Teddy Sagi said that the he did not establish the companies, but purchased them. As for the board members, the associates said that their activities were part of the services provided by Bank Leumi.

Bank Leumi said that its Jersey branch was operating within the law and regulation as required by the Jersey Financial Services Commission. “Naturally, we are unable to address specific costumer issues due to banking confidentiality,” a representative said in reponse. Bank Leumi also noted that the sale of the operations of the Jersey branch was a “part of the bank’s policy to diminish its international activity.”

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