News Brief

(IsraelNN.com) A prime witness in favor of Prime Minister Ehud Olmert in the case involving his purchase of a Jerusalem residence has been arrested in New York on charges of making fraudulent profits. The charges may seriously affect the validity of the testimony of the witness, Menachem Eitan, according to Globes.

Eitan previously has testified that he paid a similar price as that paid by Prime Minister Olmert for a residence in the same building in Jerusalem. The Prime Minister is under investigation for buying the apartment at far below market price, leading to suspicions that he in effect was bribed by the seller. However, State Comptroller and Ombudsman Micha Lindenstrauss rejected Eitan's claim and stated that the market value of the Prime Minister's house rose since the time of Eitan's purchase.

American government prosecutors have arrested Eitan and five others for allegedly running a fraudulent scheme that netted them $55 million. Eitan's arrest also will make it difficult for him to be questioned by Attorney General Menachem Mazuz, who is conducting the probe on the Prime Minister's purchase of the apartment.
 
In addition, Eitan is being represented by a lawyer who is a partner with Yossi Gross, who represented Australian millionaire Frank Lowey in a bid for the government's shares of Bank Leumi. Prime Minister Olmert also is under investigation in that case and is suspected of having used his position as Finance Minister to favor Gross.