'Charity raised money for Holocaust survivors, then stole it'

Israel Police suspect that one of the country's largest non-profit organizations embezzled millions of dollars in donations that were intended to aid Holocaust survivors.

Police said that senior executives and other members of the Hazon Yeshaya organization, which calls itself a humanitarian group, collected millions of dollars from donors, many of them foreign. They suspect that funds collected with the intention of aiding the needy and Holocaust survivors were used to buy tons of meat that was then sold to members of the ultra-Orthodox community at discount prices. Police allege the suspects then pocketed the profits from the sales.

After the undercover police investigation became public, officers from the National Fraud Investigation Unit and officials from the Israeli Corporations Authority at the Justice Ministry raided Hazon Yeshaya's offices on Sunday and arrested 10 suspects. Police believe some of the suspects committed offenses including aggravated fraud, money laundering, forgery and racketeering.

The organization's website describes Hazon Yeshaya as the humanitarian network "leading the fight against poverty in Israel today. We operate Israel’s most efficient network of soup kitchens, vocational training courses, free dental clinics and food distribution centers, with help from teams of volunteers." The organization was founded in 1997 and has since expanded into a national network that, according to its website, serves more than 400,000 hot meals to the needy at 60 locations every month. Hazon Yeshaya also aids Holocaust survivors, and therefore is funded by the Claims Conference, which allocates resources to institutions that provide social services to Holocaust survivors or engage in Holocaust research, education, and documentation.

Police launched the undercover investigation following complaints from donors and members of the Claims Conference, who suspected the group, which collected tens of millions of shekels in donations per year, of shady business dealings. According to the probe, the suspects allegedly misled donors in Israel and abroad by exaggerating the scope of Hazon Yeshaya's assistance to the needy.

Police also said the suspects allegedly collected funds to operate centers across Israel meant to aid the needy that in reality did not exist. Police believe that some of the donations did in fact go toward helping the needy and Holocaust survivors, but that most of the money went to buying tons of meat and chicken that were sold to ultra-Orthodox institutions at discounted prices. The suspects allegedly pocketed the money they earned from the meat sales.

A senior police officer said on Sunday, "A non-profit organization is not supposed to sell food. The needy were exploited in a cynical way in this case, while the higher purpose for which this association was created was trampled on." Investigators are currently working to investigate the organization's business connections and trace its financial transactions.

One of the organization's senior executives who had intended to celebrate Passover abroad returned to Israel on Passover eve (Friday) and was arrested with nine others from the organization on Sunday. One senior executive reportedly felt ill while being interrogated and was taken to the hospital. Police also raided the organization's offices in Jerusalem and confiscated documents, receipts and invoices.

Some of the suspects attended a remand extension hearing at a Rishon Lezion court on Sunday. The one senior executive arrested had his remand extended by three days, two other suspects had their remand extended by five days and one additional suspect's remand was extended by four days. The remaining suspects were released with restrictions.