The FinCEN Files: Israeli journalists expose local fallout from leaked bank documents

The Shomrim - Center for Media and Democracy - and Israeli journalist Uri Blau revealed on Sunday the involvement of Israeli companies and businessmen in suspicious money transfers exposed by thousands of leaked documents

CTech 14:2321.09.20
Israel’s largest aerospace and aviation manufacturer transferred at least $155 million to two companies associated with huge-scale money laundering for the Azerbaijani government, according to leaked bank reports for the years 2012-2014. The reason for these payments by the state-owned Israel Aerospace Industries, which manufactures advanced systems for both military and civilian use, remains unclear.


The story came to light as part of a huge leak involving thousands of banking documents that ultimately ended up in the hands of the International Consortium of Investigative Journalists (ICIJ). The Israeli connection was revealed exclusively by Shomrim - Center for Media and Democracy - and Israeli journalist Uri Blau, who are ICIJ partners.


The entrance into the IAI campus. Photo: Avi Mualem The entrance into the IAI campus. Photo: Avi Mualem

The leaked bank reports reveal money transfers from the state-owned defense giant to two companies suspected of money-laundering for the Azerbaijani government. One of the companies is alleged to have bribed an EU politician. The transfers began just months after a $1.6 billion arms deal was signed between IAI and the Azeri regime


A source familiar with the details of the deal claims, however, that to the best of his knowledge, it did not include an agreement regarding payment to any intermediary.


Lev Leviev - suspicious money transfers to former partners


Another Israeli angle emerging from the leaked bank reports is suspicious money transfers between Israeli businessman Lev Leviev and his former partners. Leaked suspicious activity reports submitted to the U.S. Treasury Department detail unusual transfers involving five companies and raising concerns over possible money laundering.


According to the publication by Shomrim, the companies owned by Leviev are at the center of a Suspicious Activity Report (SAR) submitted by JPMorgan Chase Bank to the U.S. Treasury Department.


Lev Leviev. Photo: Abigail Uzi Lev Leviev. Photo: Abigail Uzi

Attached to the report was an Excel spreadsheet detailing money transfers over a two-year period between five affiliated companies in the diamond industry, and between these five companies and customers and suppliers. It mounted to the enormous sum of $769 million. Leviev was mentioned in the report because during the period in question, he or his daughter, Chagit Sofiev-Leviev, held a 50% ownership stake in two of the companies - Elefant Diamonds LLC and Taly Diamonds LLC. The money transfers in the accounts of these two companies during the period to which the report refers amounted to around $123 million.


"The money transfers involve companies outside Leviev’s circle of companies and over which he had no control," Leviev’s lawyer replied.