The Treasury is investigating possible foreign currency violations by the Tel Hai Fund, the fund-raising arm of Likud’s Herut faction. The Fund’s attorney has denounced the probe as an election gimmick. But the Tel Hai directors will be called to the Treasury shortly to explain an alleged foreign currency transaction involving a Swiss bank.
Under Israeli law, only banks are permitted to deal in foreign currencies without a special Treasury permit. The Tel Hai Fund received no permit but allegedly attempted to pay off a creditor with two checks in the total amount of $45,000 drawn on the UTO Bank in Geneva. The case came to light when the creditor, Mrs. Polly Molizabba, a citizen of Iran, filed suit against the Tel Hai Fund because the checks bounced.
Mrs. Molizabba claimed in her suit that she had made a deal with the Tel Hai Fund in 1974 to exchange IL 215,000 for dollars. She said she loaned that amount to the Fund which promised to repay it in dollars or dollar equivalent. When the loan came due she was given checks for $25,000 and $20,000 drawn on the Swiss bank which turned out to be bad checks. Tel Hai claimed that Molizabba loaned it only IL 90,000 which it said it repaid. It denied ever having a bank account overseas.
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