28-December-2009

Sunday, attorneys from the Tel Aviv District Court tax and finance bureau filed indictments at the Petah Tikva District Court against five men suspected of illegal online gambling, tax offenses and fraud.

Authorities say the men—Meir Abergil, Yoram Zarfati, Yoel Schneider and brothers Reuven and Ezra Gavrieli—oversaw a network of some 100 online gambling programs offered in Internet cafes, kiosks and lottery stations across Israel between 2000 and 2002.

Reuven and Ezra Gavrieli are best known as the father and uncle of former Knesset member Inbal Gavrieli. In 2006 the Movement for Quality Government requested that Israel's attorney general investigate Ms. Gavrieli's use of parliamentary immunity to prevent police from searching Reuven's home for proof of tax evasion and illegal gambling. Ms. Gavrieli subsequently lost her parliamentary seat in the March 2006 elections.

Bureau attorneys also filed indictments against several of the suspects’ companies Sunday. According to the indictments the companies registered Israeli-made bets in the Dominican Republic, then printed the transaction reports in Cyprus and forwarded them to Israel.

Central to the indictments are charges that many Israeli residents who lost money at the betting venues made on-site cash and check payments. According to Israeli law, it is not illegal for Israelis to own or hold shares in online gambling companies; however, these companies may neither offer their services to Israelis, nor operate out of Israel.

Prosecutors charge that the operation was the “brainchild” of Reuven Gavrieli and partner Motti Menashe. They went on to allege that Gavrieli and Manashe’s firm, Bet and Chat, distributed its online gaming program, “Net Casino,” to participating venues through the four other suspects.

Currently Alexa.com lists BetAndChat.com's contact e-mail address as joe@kodag.com. According to Koffix Blocker, the e-mail address belongs to Adi Tarkay, who it says, founded online gambling operator PrincessNet and Internet-marketing agency NetoMedia.

Both PrincessNet and NetoMedia are based in Tel Aviv. In 2005, Koffix claimed NetoMedia was engaging in blog and forum spamming, a marketing technique considered unethical by industry standards. It is unclear, however, whether PrincessNet, NetoMedia or Tarkay are linked to the five suspects named in Sunday’s indictments.

Accompanying Sunday’s indictments was an order from the bureau’s lead prosecutor, Ela Rubinek, for the seizure of the suspects’ assets, including homes, agricultural holdings and over $5 million in vehicles. The suspects’ gambling operations, the Tel Aviv District Attorney’s office told English-language newspaper Haaretz, “brought in revenues of tens of millions of shekels.”

One attorney for Zarfati told Haaretz that he would comment on the charges “once we learn more about the case.” The newspaper said representatives for Menashe refused to comment and attorneys for the Gavrielis could not be reached.

By: Phill Provance & Rotem Katz
phill.provance@acehoyle.com

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