Operation ‘Grey Hit’: Police bust grey market criminal syndicate

Written by on August 4, 2022

After a long undercover investigation that lasted over a year by the Tel Aviv District Central Unit, together with an open investigation that was ongoing in recent weeks, a branch of the gray market in Israel’s central district was shut down and 15 suspects were arrested, a police spokesperson announced on Thursday.

The case, which was called “Grey Hit,” was managed by the Tel Aviv District Attorney General, in cooperation with the Tax Authority and the Tel Aviv District Criminal and Civil Prosecutor’s Office.

What happened and how were they caught? 

A crime family established an interest loan bank and used an onslaught of terror and violence on borrowers who had difficulty making payments, police estimate the syndicate lent money to over 200 people.

To crack down on debtors, the family resorted to shooting at houses, throwing stun grenades, arson, and the use of attack dogs. Among those terrorized by the family were an elderly grandfather whose grandson owed money and a kindergarten owner whose brother got into debt.

Holon (credit: Wikimedia Commons)

The criminal syndicate was run by a family-based criminal organization led by Holon resident Shmuel Kahlon, 64, and his sons Avi and Noam (37, 35), all of whom were arrested together with 12 other suspects on suspicions of extortion by threats, causing an explosion with explosives, arson and money laundering, as well as other tax and economic offenses.

The police investigation found a hierarchical organization that included a collection system and a laired financial system based on foreign exchange business. The scope of money laundering according to the tax authorities is between NIS 15-25 million – and the scope of tax evasion is around NIS 10 million.

During the investigation, Central Unit detectives raided the houses of suspects and the organization’s main “office” in Holon – where, among other things, batons, bulletproof vests and attack dogs were seized.

Borrowers who could not make loan payments in time, which collected hundreds of percent of interest per year, were victims of constant threats and violent actions towards them and their family members.

In one of the cases, a 74-year-old grandfather, whose grandson had difficulty repaying a loan, was summoned to a meeting at the family’s offices in Holon. During the meeting, the grandfather was threatened by the suspects when two Rottweiler dogs were kept in the room, according to a police spokesperson.

In another case, a debtor’s sister who owns a kindergarten became the target of the syndicate which demanded large sums of money from her. She was “called to the office” after a stun grenade was thrown at the kindergarten she owns.

A prosecutor’s statement was submitted in the case of 13 suspects, and the prosecutor’s office intends to submit indictments and incarceration requests against them until the end of the proceedings.

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