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U.S. Moves to Arrest Israeli Contractors Charged with Bribery

April 30, 1993

WASHINGTON (AP) _ The United States is taking steps to apprehend two former Israeli generals charged with bribing an assistant Navy secretary and a defense consultant.

″Bench warrants have been issued″ in Israel, Assistant U.S. Attorney Joseph J. Aronica said Thursday. ″We’re going to start the process.″

Zvika Schiller and Uri Simhony were charged in a three-count indictment returned in U.S. District Court in Alexandria, Va., with paying $268,000 in bribes into a Swiss bank account between 1986 and 1988.

The case was part of Operation Ill Wind, the government’s 6-year-old investigation into defense industry corruption.

Schiller and Simhony were both generals in the Israeli defense forces, said Aronica. Simhony had been a military attache at the Israeli embassy here and Schiller had been chief of Israeli security before 1984, Aronica said.

He declined to predict whether they might be extradited to the United States for trial. ″You never know,″ he said.

To date, the Ill Wind investigation has resulted in 59 convictions and more than $230 million in fines and restitution.

Prosecutors say Schiller, president of an Israeli company called Mazlat, and Simhony, a private defense consultant, bribed then-Assistant Navy Secretary Melvyn R. Paisley and defense consultant William M. Galvin. Mazlat marketed remote-piloted vehicles and had a contract with the Navy.

According to the indictment, Schiller and Simhony paid Paisley to get the Navy to use the Mazlat ground control system on another remote-piloted vehicle that was to be purchased from a different contractor in 1986.

In return for Paisley’s influence, Schiller allegedly agreed to pay money into bank accounts in Switzerland under the name of Lorena Overseas, S.A., a Geneva-based company through which Galvin operated. The four men agreed to share these funds and expected Mazlat would pay $2 million over two years.

On May 7, 1986, Paisley signed a memorandum directing the Navy to use the Mazlat ground control system on another remote-piloted vehicle. Six days later, Mazlat allegedly made its first $50,000 payment to Lorena in Switzerland.

Additional payments were made in 1987 and 1988, according to the indictment.

Schiller and Simhony are accused of participating in a conspiracy to defraud the United States and to commit bribery of a public official. They also each are charged with one count of bribery of a public official and one count of payments to a former public official. If convicted, they could be sentenced to up to 22 years in prison and up to $750,000 in fines.

Paisley pleaded guilty in 1991 to accepting bribes in exchange for helping steer business to two other contractors. He is serving a four-year prison term.

Galvin pleaded guilty in March 1990 to conspiracy, bribery and tax evasion in connection with other defense contractors. He was sentenced to 32 months in prison and was recently freed, Aronica said.

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