Former Gun-Running Israeli Billionaire Indicted for Fraud
Israeli billionaire Arcadi Gaydamak has been indicted by the Israeli government on charges of fraud and money laundering in connection with a $175 million deal to buy a Dutch company. Gaydamak is accused of hiding his involvement as the buyer in the deal, using a front-man and with help from Israel’s second-largest bank. Several bank executives were also charged.
Also known by his Hebrew name Ari Barlev, Gaydamak is also facing a 1990’s arrest warrant from France, for purported arms deals with Angola. Born in Russia, by the early 1980s he was running a successful translation company while living in France, servicing Russian companies doing international business. By the late 1980’s he had diversified into the import-export of wheat, coal, meat, and ultimately weapons. A two year investigation by the International Consortium of Investigative Journalists (ICIJ) (reported by the Center for Public Integrity) found that he created nearly a dozen shell companies in more than seven countries to cover his financial and business dealings.
In 1995, Russian Interpol officers told American Interpol officials in Washington, D.C that Gaydamak was suspected of being involved in an international criminal organization. The Russian Interpol believed that French political allies were protecting Gaydamak, but in 1999 Gaydamak was convicted in France of tax evasion and fined $35,000.
In December 2000, the French press exposed the weapons deals to Angola, and Gaydamak was a central figure. Gaydamak worked with a partner, Pierre Joseph Falcone, who at the time was running the Sofremi, an arms export agency that was controlled by the French Interior Ministry and major weapons manufacturers, including Thomson SA, Alcatel SA and Aerospatiale SA. In the early 1990’s, Gaydamak and Falcone sold $790 million worth of Russian-made tanks, rockets, helicopters, combat vehicles, troop transporters and other armaments to Angola, despite a UN arms embargo. Gaydamak also brokered a phony debt-relief scam between Angola and Russia, which he pledged would net the Soviets $750 million. Instead, Gaydamak walked away with $600 million, while Russia saw a mere $161 million. Gaydamak (who holds a diplomatic Angolan passport as well as passports from France, Russia, Israel and Canada) was tried for his role in the Angola-gate episode in absentia along with 41 others in a four-month trial beginning in October 2008; a verdict is expected late this month.