Israeli Police Arrests Suspect in $35 Million Swindle

A 41 year-old man was arrested in Tel Aviv Sunday evening after he and his brother allegedly received and sold $100 million worth of memo goods, but did not forward all of the money to the seller, according to the Tel Aviv police.

The man, owner of Peykar International with office in the Diamond Building of the Israel Diamond Exchange, was arrested on suspicion of theft, after the South African company that gave the goods accused him of not paying $35 million in outstanding debt, according to Tel Aviv spokeswoman Sigal Toledano.

The South African company alleged that the suspect, originally based in New York, received the diamonds on memo. He was to sell the goods, pass the proceeds to the South African company and keep a fee for himself. However, after paying about $65 million the payments stopped.

After repeated requests to be paid, the suspect handed over a number of sealed boxes that were supposed to hold diamonds. These boxes turned out to be either empty or contain diamonds of very low value.

While the investigation continues in Israel, authorities in the U.S. are investigating the company’s New York operations, according to Toledano.

The suspect will be brought on Monday afternoon to the Tel Aviv Peace Court for arraignment.