Foreign Minister Avigdor Lieberman set up a company in the Virgin Islands in 2001, while he was serving as infrastructure minister, according to new details of the draft indictment against him that have been obtained by Haaretz.
The draft accuses Lieberman of continuing to run a worldwide business enterprise that brought in millions, including from people with business interests in Israel, while he was serving as a minister and Knesset member. He also allegedly concealed this enterprise from the relevant authorities, first and foremost the state comptroller.
Attorney General Yehuda Weinstein will hold a hearing for Lieberman in the coming months, after which he will make a final decision on whether to indict. Lieberman recently beefed up his legal team in preparation, hiring attorneys Yaron Kosteliz and Giora Adereth.
The tentative charges include fraud, breach of trust, aggravated fraud, money laundering and witness tampering.
Prosecutors are also considering indicting Lieberman's daughter Michal, his long-time attorney Yoav Many and his aide, Sharon Shalom. Many is suspected of fraud, breach of trust and aggravated fraud, while Shalom and Michal Lieberman are suspected of money laundering and abetting fraud and breach of trust.
In late 1997, Lieberman resigned as director general of the Prime Minister's Office and began a business career. He set up two companies - Nativ el Hamizrach ("Path to the East" ) in Israel and a similarly named firm in Cyprus - whose activities included commerce in wood in various countries, including Israel.
In 1999, he was elected to the Knesset. But hundreds of thousands of dollars continued to flow into his companies from various businessmen, including those with interests in Israel. In 2000, for instance, the Cypriot firm received $100,000 from an Austrian company owned by Martin Schlaff - who, inter alia, was part owner of the Jericho casino - and $500,000 from Schlaff's partner, Austrian businessman Robert Nowikovsky. The latter also posted a $1 million bank guarantee for Lieberman's Yisrael Beiteinu party in 1999.
In 2001, Schlaff paid $650,000 to the Cypriot company. In March of that year, Lieberman became infrastructure minister in Ariel Sharon's government.
Shortly thereafter, he reported to the State Comptroller's Office that he had sold the Cypriot company to a close friend, businessman Joseph Schuldiner of Antwerp, for $610,000. (Schuldiner died in 2006. ) But prosecutors say this sale was fictitious, and in reality, Lieberman continued to control the company.
Lieberman also informed the comptroller that he had sold another Cypriot company, Mountain View, one day after his appointment. But this sale, too, was fictitious, prosecutors say: The new owner was merely a front for Lieberman's continued control.
In May 2001, a company controlled by Israeli businessman Michael Chernoy, a close friend of Lieberman's, paid $500,000 to Mountain View. Prosecutors say Lieberman then used his government posts to try to restore Chernoy's Israeli passport, which he had been stripped of in 1999, and to assist him in other personal matters.
Officially, Chernoy lost his passport because he hadn't been in Israel long enough to have one. But police were also investigating suspicions that he lied on his immigration application by concealing his involvement in various serious crimes - suspicions that led the Interior Ministry to announce in 2004 that it was might strip him of citizenship altogether.
Ultimately, Chernoy got his passport back - for one year only - by petitioning the High Court of Justice in 2007. The Interior Ministry has since repeatedly renewed it.
Even as Lieberman reported having sold his Cypriot companies in 2001, he and Many were setting up a new company, named Mayflower Capital Premier, in the Virgin Islands that same year. To conceal Lieberman's absolute control over the company, prosecutors say, it was registered as being held in trust by another firm controlled by Lieberman's former driver and close associate, Igor Schneider.
In 2002-08, the company's revenues exceeded $6 million. During most of that time, Lieberman held various public positions.
In July 2003, while Lieberman was serving as transportation minister in Sharon's government, Mayflower received $500,000 from a firm controlled by Lieberman's friend Dan Gertler, an Israeli diamond merchant based in Congo. The money was said to be payment for mediating a sale of sugar. In reality, prosecutors say, it was made for other purposes entirely, though the draft doesn't specify what.
That same summer, Mayflower was paid $3.5 million for a single transaction. A few days later, it paid out $2.5 million to another Virgin Islands company then owned by Lieberman's friend Schuldiner - the man to whom he sold the Cypriot company in 2001.
In 2007, while Lieberman was strategic affairs minister, Mayflower received several payments totaling $230,000 from a company controlled by another Lieberman friend, Moldovan Jewish businessman Daniel Gittenstein. A year later, it received $455,000 from another company controlled by Gittenstein.
From July 2004 to April 2006, Lieberman was out of the Knesset and back in business. During that time, his daughter Michal set up the company M.L. Lieberman. She and Lieberman's aide, Sharon Shalom, were the signatories on its bank account; they also signed documents listing the company as the account's sole beneficiary and themselves as the firm's owners. In reality, prosecutors say, Lieberman controlled the company and benefited from the millions it earned even after he returned to the Knesset and cabinet.
Until early 2008, including during the period when Lieberman was an MK and strategic affairs minister, M.L. Lieberman received monthly payments of $65,000 from another company controlled by Gittenstein. These payments were listed as consultancy fees, but prosecutors, again without elaborating, say they were no such thing.
Altogether, M.L. Lieberman had revenues of $2.8 million, including over $1 million earned while Lieberman was in government. Prosecutors say most of this money went to Lieberman himself, funding his expenses, a secretary and driver, security and trips overseas during the almost two years he spent working for the company.
Police began investigating Lieberman's business activities in 2006. One person they questioned was Andy Boiangiu, who served as CEO of Nativ el Hamizrach in 1998-2001.
In 2007, prosecutors say, Lieberman asked the company's secretary, Yelena Weinstein, to set up a meeting for herself with Boiangiu while concealing the fact that Lieberman was behind it. Lieberman then allegedly came to the meeting in Weinstein's place and discussed the police investigation with him - which prosecutors say constituted witness tampering.
In 2008, then-ambassador to Belarus Ze'ev Ben Aryeh allegedly told Lieberman about a police request to the Belarusian authorities for information on one of Lieberman's alleged companies. The following year, Lieberman, now foreign minister, made Ben Aryeh his diplomatic adviser.
Lieberman's media adviser, Tzachi Moshe, responded: "We believe that after he hears Minister Lieberman's positions, the attorney general will decide there are no grounds for indicting Minister Lieberman. The only suitable and proper place for addressing these allegations is naturally before the attorney general, not in the media. We will only say we believe that just as the suspicions of bribery were dropped, the same will happen with the rest of the suspicions raised against Minister Lieberman over the last 15 years."