Boris Weissman and his son, Avissar Weissman, former owners of a chain of clinics for treatment of sexual dysfunction, concealed more than NIS 763 million in income, among other things through straw companies in Panama and the Virgin Islands, using liaison personnel to transfer cash, and money launderers in Romanian casinos, according to the first court indictment filed in court in the UBS Switzerland affair.
The Tel Aviv District Attorney's Office (taxation and economics) and the Economic Department in the State Attorney's Economic Department this morning filed an indictment at the Tel Aviv District Court against Boris Weissman, Avissar Weissman, Meron Neeman, Moshe Rachamut, and Arik Israeli for fraud under the Income Tax Ordinance and money laundering.
According to the indictment, Boris Weissman founded and managed his chain of clinics in the 1990s, and was later joined in management of the chain by his son, Avissar. In the first decade of the 21st century, they founded a company in the Netherlands Antilles islands, and expanded the chain's business to various Eastern European countries. The chain later expended to 60 overseas clinics, with the clinics being owned through the company resident in the Netherlands Antilles.
The clinics in the chain were incorporated through local companies in various countries, which according to the indictment were indirectly or directly owned by Boris Weissman. According to the indictment, he also founded a company in Israel, from which the activities of the overseas clinics were coordinated.
Following a comprehensive reform in Israeli tax law, Israeli residents and companies resident in Israel were required starting in 2003 to report their income anywhere in the world. Boris and Avissar Weissman, who controlled and managed the chain of clinics from Israel, were therefore obligated to report their income to the Tax Assessment office in Israel. The indictment asserts, however, that in order to conceal the fact that they controlled a company resident in a foreign country, and through it the chain of clinics, Boris and Avissar Weissman made false representations in their reports and capital declarations submitted to the Tax Assessment Office.
The indictment indicates that the amount of illegally unreported income totaled over NIS 763 million. In addition, the indictment alleges that Boris and Avissar Weissman founded a number of straw companies resident in the Virgin Islands and Panama, that these companies held accounts in UBS Switzerland, and that the income from the clinics was transferred to these accounts. Boris and Avissar Weissman allegedly received some of the profits from the clinics in cash in Israel.
"The accused deliberately and maliciously used fraud, deceit, and trickery, so that the companies evaded taxes in Israel," the indictment stated.
According to the indictment, the fraud worked as follows: Boris and Avissar Weissman built and used a holding structure designed to conceal their control of the local companies, a company founded in the Antilles, and two companies in Panama and Nevis Island in St. Kitts and Nevis. The local companies transferred their income to the bank accounts in Switzerland, while Boris and Avissar Weissman concealed their control over these companies. From there, the money was sent to their personal accounts in Switzerland, or used to operate the chain of clinics.
The indictment relates how the money was concealed, transferred to Israel in various ways, and laundered. The indictment states that Neeman, Rachamut, and Israeli transferred the money to Israel for Boris and Avissar Weissman, and among other things, made cash transfers in order to evade taxes, while refraining from reporting the money upon entry into Israel, in violation of the Prohibition on Money Laundering Law.
The State Attorney's Office alleges that the income from the clinics was transferred at the instruction of Boris and Avissar Weissman to accounts in other names. The Weissmans withdrew money from these accounts to pay for operation of the clinics, and the remaining profits were sent to personal accounts they owned.
According to the indictment, the Weissmans used cash extensively in their business, which rendered their alleged tax evasion and money laundering easier. The indictment states that the Weissmans received part of the income from the clinics in 2007-2013, which was handed to them by employees of the chain of clinics and by others. At this stage, the other three people indicted entered the picture.
The indictment alleges that Neeman was responsible for transferring money from the clinics in Romania in 2007-2010, with the amounts transferred to Israel in cash constituting the bulk of the profits from the clinics there. After receiving the cash in in Romania, Neeman found a party to transfer the money to Israel and reported to the Weissmans how much had been transferred using code words designed to conceal the fact that income in cash was being transferred.
During these years, the indictment alleges, Neeman transferred at least NIS 29.5 million to Boris and Avissar Weissman. Rachamut then took over the job of transferring funds from Romania in 2011-2013, and sent the Weissmans no less than NIS 8 million during those years.
Published by Globes [online], Israel business news - www.globes-online.com - on June 29, 2016
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