Paris - (AFP) - A judge and members of the French gendarmerie arrived in Israel as observers, as part of an investigation into a fraud in France that led to the arrest of suspects, a judicial source said Tuesday.

The source in Paris said that the arrest of suspects in Israel is related to “an investigation by the Israeli authorities into money laundering and financial fraud, in connection with a judicial investigation opened” by the Paris Public Prosecution on January 5, 2021.

According to sources close to the file in Israel, the arrested are Israelis, four men and a woman. They are suspected of laundering part of the money and converting it into cryptocurrency.

And on Monday, the Israeli police arrested "three main suspects" and "a number of people" believed to belong to a criminal organization that stole the registered names of existing companies and their identification numbers to request compensation in France as part of government submissions to address the repercussions of the Covid-19 pandemic.

The investigation was opened in Israel against the backdrop of suspicions of "laundering tens of millions of shekels using complex mechanisms" for cryptocurrencies.

The Israeli police announced that the suspects are in custody pending questioning.

The judicial source stated that "an investigative judge and investigators are in Israel" as observers.

According to the source, the judicial investigation in France deals with "about four thousand forged requests for compensation for the partially unemployed."

The financial losses incurred by the French state as a result of these operations are estimated at 8.5 million euros, according to a document seen by AFP.

Three persons have been investigated in this case in France since June 2021, one of whom is 31 years old and placed under preventive detention.

He is suspected of having opened bank and intermediary accounts in Lithuania to which public funds and laundered funds were transferred.

He "denies being the mastermind of this fraudulent operation," according to what his lawyer, Philippe Avon, told AFP.

The judicial source considered that "this procedure reflects the quality of cooperation with the Israeli judicial authorities and full security cooperation in combating fraudulent operations that are carried out from Israel and target French victims."

In a statement to AFP, David Katz, head of the cybercrime unit at Lahav 433, the anti-crime organization in Israel, said that "crimes centered around encrypted operations are on the rise, and the Israeli police are developing technological tools to combat them."

He also stressed that "cooperation between the French and Israeli police is excellent and is being strengthened."