Lev Leviev, the Russian-Israeli oligarch who rose from humble beginnings in Tashkent to become one Israel’s most powerful diamond merchants and real estate developers, in allegedly under investigation in both Israel and the UK for smuggling blood diamonds from his African mines to Russia and subsequently to Israel. According to Israeli media reports, hundreds of millions worth of such diamonds were excavated in African mines and found their way to Israel over a six-year period. Leviev is accused of paying up to twenty couriers to attempt to smuggle the valuables into Israel without declaring them to customs. Among the charges against him are money-laundering, bribery, tax fraud, falsification of corporate documents, and others.
There is a gag order prohibiting publication of the identity of the state’s witness who broke open the case. Although some Israeli media have also refrained from naming Leviev as the chief suspect, News1 has done so, though it too has not named the informant. What News1 has reported would appear to violate the gag order, though its article remains available on the website. UPDATE: The gag order has just been lifted and Maariv is reporting Leviev’s identity in connection with the case.
Over the past year, Leviev’s once formidable empire has come crashing to earth. In an attempt to save it, it appears he may have resorted to trying to raise capital through selling the diamonds on the black market. His scheme collapsed and he has already lost his real estate empire, which was sold at fire sale prices to real estate investor, Moti Ben Moshe.
The Israeli media portal, Walla!, reports that Leviev’s brother and son are among a total of six suspects arrested by Israeli police. Wikipedia reports that Leviev has a son named Joshua. An earlier report by News 1, declares that UK authorities are also investigating the case, which makes it international in scope. This report declares that when Leviev got wind of the UK investigation he fled the country and currently is in Russia, placing him beyond the reach of either countries’ police authorities.
I’ve reached out to Britain’s National Crime Agency shortly after the News1 story broke and asked whether it was conducting an investigation. The communications staff did not reply. I’ve sent another message today and hope for some response from them. I will update this post if/when they do.
This story is important not just because of Leviev’s former stature as an international business figure spanning Africa, Russia, Britain and Israel; it’s also important because of Leviev’s role in expanding Israeli settlements and bedecking Hollywood celebrities for years in magnificent baubles, whose origins were not always transparent.
Leviev once owned Africa-Israel Development, which built settlements and also owned premium real estate in New York and other cities around the globe. He even once owned the Plaza Hotel and also bought the former New York Times building. His partner in this transaction was none other than Jared Kushner and his father’s real estate company. The Guardian reports that some of the funds used by Leviev’s business partners in this transaction may have originated in the $250-million Russian theft which Sergei Magnitsky was investigating when he was arrested and subsequently died in a Russian prison.
Leviev often overspent wildly for such prestige properties and had trouble meeting obligations to his lenders. Finally, his profligacy caught up to him and AFI collapsed.
His former company is also suspected of making dubious land deals – where real estate was purchased in Russia and Ukraine at inflated prices. A portion of the inflated price paid to the owner was funneled to Leviev himself, meaning he was defrauding his own company. His departure from the UK led directly to his resignation from the management of AFI. This is the latest News1 report on this story.
During his heyday, Leviev was the largest donor to the Chabad movement, which had once expelled Russia’s then-chief rabbi from his position and installed a Chabad rabbi in his stead. The new rabbi was a favorite of the Kremlin and had Putin’s blessing. This brought Leviev into close contact with Putin and made him a confidant of the powerful Russian leader. Leviev was also known to have close business relationships with other Russian Jewish oligarchs like Roman Abramovich. Both men lived in Britain. Leviev himself once owned the most expensive home in the entire UK, which he purchased for $70-million.
However, both figures have fallen out of favor since Russian intelligence agents attempted to assassinate a former KGB agent in a British provincial town, leading to an international scandal, which embarrassed both the Russians and the British government. Recently British officials refused to renew Abramovich’s residency permit, which forced him to turn to Israel, where he was offered immediate citizenship under the Law of Return. There are a number of prominent Russian Jewish oligarchs who’ve taken up residence in Israel, using it as a second base of operations. Among them, Leonid Nevzlin, a major investor in Haaretz; and Piotr Aven, who runs the Genesis Prize on Nevzlin’s behalf. Arkady Gadaymak is another oligarch who once owned Jerusalem’s infamous racist soccer club, Beitar Jerusalem.