|The Fraud Squad of the Israeli Police has been called in by the Israel Diamond Exchange to investigate serious allegations of fraud perpetrated by a diamond dealer operating in the diamond exchange.
News reports in the Israeli media say a diamond dealer by the name of Hanan Abramovich is suspected of buying diamonds valued at around $60-65 million, which he then passed on, but did not pay for. Several companies reportedly fell victim to this scam, and the fear is that the defaults on payments could cause the bankruptcy of up to a dozen diamond companies.
A police spokesperson is quoted as confirming that Abramovich has been arrested and is currently being questioned on suspicion of embezzlement. Abramovich appeared in court on Wednesday, where his arrest was reportedly extended for two days.
A statement issued by the management of the diamond exchange said that the investigation had been launched after complaints were received by several companies claiming they were owed tens of millions of dollars for goods sold to Abramovich's company. Israel Diamond Exchange managing director Eli Avidar said, "The Diamond Exchange's management will show zero tolerance to those who hurt other members of the exchange. Israel's diamond sector has been going through difficult times in recent years and to our regret we are being exposed to unfortunate instances like these where the situation is being exploited. The Diamond Exchange management will work resolutely to clarify the case including working with the enforcement authorities."