Israeli diamond tycoon Beny Steinmetz among five arrested for fraud

Israeli police on Monday (14 August) arrested a prominent billionaire businessman and four other suspects on an array of charges, including money laundering, obstruction of justice and bribery.

The police said the suspects were taken into custody and questioned following a joint investigation with Swiss and American authorities.

One of those arrested was Beny Steinmetz, a Geneva-based diamond-mining magnate with an estimated worth of just over $1bn, according to Forbes.

Steinmetz was also arrested by Israeli authorities in December over allegations of bribing officials in the west African country of Guinea to promote business interests there. He spent two weeks under house arrest at that time.

Among the four other suspects arrested were Tal Silberstein, a former political consultant to ex-Israeli premier Ehud Barak and an adviser to the Austrian chancellor, as well as the CEO of Israeli telecom giant Bezeq, David Granot.

Police wouldn't elaborate on the specifics of the current investigation. A court extended Steinmetz and Silberstein's custody later on Monday.

Israeli media reported in December that Steinmetz was suspected of bribing the former leader of Guinea and his wife for rights to mine at the Simandou range, one of the world's largest sources of iron ore. Steinmetz's company BSGR previously had its mining license revoked in Guinea because of corruption charges.

Austria's Social Democratic Party announced it is severing business relations with Silberstein. Social Democratic Party official Georg Niedermuhlbicher said his party's move is a result of "the legal accusations that have been made known from Israel". The party is the senior partner in the coalition now governing Austria.

The development comes ahead of October national elections and could hurt the Social Democrats, who are trailing behind centre-right and right-wing rivals in polls. The other parties are criticising the Social Democrats for choosing Silberstein as a consultant.