Israel could not link Bobroff millions to crime in SA

Israeli law enforcement agencies could not establish a link between the R95 million they froze in the bank accounts of fugitive attorneys Ronald and Darren Bobroff in 2017 and the money the duo stole in South Africa by overcharging road accident victims.

The Israelis could, therefore, not assist the National Prosecuting Authority (NPA’s) Asset Forfeiture Unit (AFU) in recovering the money, but proceeded to institute civil and criminal proceedings against Darren Bobroff related to money laundering.

These proceedings were later terminated after the parties (Israel and Darren Bobroff) settled without proactively informing or consulting the NPA, which saw the State of Israel appropriating around R70 million of the funds and allowing the Bobroffs to retain the balance of about R25 million.

The Israeli’s inability to draw a link is despite the Supreme Court of Appeal (SCA) ruling in May last year that the money the Israelis froze was the proceeds of crime and must be forfeited to the state.

These developments are revealed in a letter the Israelis sent to the South African Department of Justice (DOJ) in April 2021.

The letter, signed by a senior deputy to the State Attorney of the State of Israel, Yael Bitton, also informed the DOJ of the settlement agreement.

Moneyweb received a copy of the letter from the NPA after applying for it in terms of the Promotion of Access to Information Act (Paia).

Interestingly, the Department of Justice refused us a similar PAIA application, stating that the record “would reveal information supplied in confidence by or on behalf of another state.”

South African authorities have also escalated the case to the DOJ and the Department of International Relations and Cooperation (Dirco) on the instruction of Minister of Justice Ronald Lamola.

Background

The case dates back to March 2017, when Israeli authorities seized R103 million in the Bobroffs’ bank accounts in that country.

The South African Supreme Court of Appeal later ruled that R95 million of this money was the proceeds of crime and should be forfeited to South Africa.

After the seizure of the funds, the NPA asked the Israelis for assistance in returning the money to South Africa.

The Israelis then requested the NPA to provide evidence that the funds could be linked to the Bobroffs’ fraud and theft in South Africa.

The NPA complied and shared information with Israel and even met with Israeli representatives.

However, in the letter to the DOJ, Bitton wrote that the Israeli authorities “ultimately determined that this investigative avenue was not viable, since it was not possible to establish a link between said assets and the offences allegedly committed by Bobroff in South Africa”.

“Due to the inability to link the assets to the South African investigation, the aforementioned seized funds were at immediate risk of being released.”

Pivotal affidavit from Sars

Bitton stressed that information supplied by the NPA, and “in particular the provision of a vital affidavit from a Sars [South African Revenue Service] representative”, assisted Israeli in building a domestic criminal money-laundering investigation against Darren Bobroff.

The letter also revealed an offer to share the spoils with South Africa. “In recognition of the important assistance provided by the South African authorities and law enforcement in the Israeli investigation, the State of Israel proposes sharing a total of 3 million NIS (R14 million) with the Government of South Africa.”

This amount is yet to be paid, although discussions between South African and Israeli authorities are ongoing for the full R95 million to be returned.

Bobroffs’ response

Richard Spoor, the Bobroffs’ attorney in South Africa, said in response that the Israeli letter confirms what “we have said all along”, echoing previous denials of wrongdoing. (Read the full response here)

Spoor was also critical of the Israeli conduct and the settlement agreement, which he previously labelled highly opportunistic.

“The Israelis were rescued by the settlement agreement that they entered into with (Darren) Bobroff, which, as we previously advised, was entered into under duress, namely the threat of arrest and extradition of Darren to Israel and the seizure of all their assets and property in Australia.

The settlement was effectively extorted out of them. The letter confirms this. They had no case against Bobroff but were able to extort money from them, through the abuse of state power.”

He said: “The Bobroffs knew that the Israelis had no basis to believe that the moneys in the Israeli bank accounts were the proceeds of any criminality and that the SA request was bunkum. They also knew that the Israelis knew that there existed no valid legal grounds to confiscate the monies. That said the Israeli process is secret and they (the Bobroffs) were not allowed to see the evidence that the Israelis relied upon.

“They were also threatened with the freezing of their assets and the arrest and detention and deportation of Darren to Israel where he could be held for months. They had little choice but to agree to the Israeli Ministry’s extortionate demands.”

He added that the “Bobroffs agreed to let the Israeli authorities take their money in exchange for their freedom and the release of a small part of their assets.” He noted that the Bobroffs had initiated proceedings in Israel to take the agreement on review.

Spoor also acknowledged that the money was moved to Israel illegally. “Some moneys were transferred without permission of the SA Reserve Bank.

The Reserve Bank limits the amount of money South Africans can move offshore. That offshore holding has since been declared, and a penalty was imposed by the tax authorities.”

This fine remains unpaid.

Moneyweb sent questions to Bitton, but she did not respond.

NPA’s response

The NPA seems unfazed by these developments.

Bulelwa Makeke, NPA head of communications, said in response to questions that Israel’s conclusion that no link could be drawn between the funds seized in Israel and the alleged transgressions in South Africa has no bearing on the NPA’s criminal investigation and the extradition application.

Makeke added that the extradition application is “pending the finalisation of the investigations.”

Advocate Suna de Villiers from the AFU said the actions of the Israeli authorities do not affect its actions to recover the money.

“Our case is not linked to the criminal investigation. In our application, we need to convince a court that a person received the proceeds of crime and it is not dependent on a criminal conviction.

“We said the money in Israel was the proceeds of crime, and we will continue to pursue the seizure of the funds.”

De Villiers also stated that SA’s minister of justice phoned her recently and asked that the case be escalated to the DOJ and Dirco. “So, the case is being dealt with at a very high level.”

Seizure of properties and money in Australian bank accounts

An interesting aspect of the settlement agreement was that the Israelis asked the Australian government to freeze assets the Bobroff owned in Australia.

The Australians subsequently issued a summons in which they wanted to seize the five Bobroff-owned properties and freeze three bank accounts.

The summons provides details of the properties. A deed search revealed that the Bobroffs sold two properties in September last year to a company called CJNSW PTY LTD for $0.  The director and secretary of CJNSW is Cindi Jaches, Ronald’s daughter.

The family still owns the other three.

Listen to Moneyweb editor Ryk van Niekerk’s recent interviews with the Bobroffs’ lawyer Richard Spoor and the NPA’s Suna de Villiers: 

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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