Police said the suspects conducted a range of undeclared banking activities and illegally handled around a billion shekels, The Jerusalem Post reported Sunday.
"The suspects systematically laundered large sums of money ... converted foreign currency, and gave illegal loans," police said. "They made major profits, and used their offices as an undeclared bank."
The suspects are also suspected of transferring funds abroad, police said.
Undercover agents of a unit called the Task Force against Professional Money Laundering followed suspects for several months at the diamond exchange gathering evidence, authorities said.
"The suspects' activities were disguised as legitimate trading activities," police said.
Authorities said the suspects would be charged with money laundering, banking offenses and tax evasion, the Post reported.