Israel’s attorney general has said that, pending a hearing, he will indict Interior Minister Arye Dery for tax evasion but will not pursue charges against him for fraud, obstruction of justice, and other alleged crimes.
On January 8 Attorney General Avichai Mendelblit released a statement saying that Dery used a backdated contract for the 2013 sale to his brother of property that was described as a vacant lot when it actually included a building under construction. The consideration for the sale was also understated, Mendelblit's office said.
Another charge in the draft indictment involves an ILS 630,000 (around $197,000) fee that Dery allegedly received for persuading an unnamed person to invest in a U.S. fund. The attorney general’s office said it has evidence that Dery told the fund to transfer the commissions to his brother.
The final charge involves fees that Dery allegedly received for providing consulting and marketing services that were not included in either his personal or corporate tax returns. In November 2020 the national police agency recommended that Dery be indicted for breach of trust, fraud, money laundering, obstruction of court proceedings, and tax-related offenses. The attorney general’s office said Mendelblit decided that there was insufficient evidence to prosecute Dery on the other allegations.
Dery responded to the announcement on Twitter. "After five difficult years of investigation, I thank God for the decision to cancel all the false charges against me and I am convinced that after all the facts are presented to the Attorney General at the hearing, it will be decided to close the taxation file as well," he said
Tadmor Levy & Co.'s Head of Tax, Boaz Feinberg, said hearings in Israel are not a formality:
“In accordance with case law, the suspect is entitled to receive the core investigation material to prepare for the hearing,” he said in an email. “The case law stipulates that the prosecutor must approach the hearing with an open heart and willingness to hear the suspect's claims. I could tell you from experience (both personal and in general) that in many cases the hearing procedure made a difference, either by amending the indictment to lighter allegations, or even in rare cases [revoking] the indictment altogether.”
Dery, who began his current term as interior minister in 2016, held the same position between 1988 and 1993. In 2000 he was convicted of accepting bribes during his earlier term and served 22 months of a three-year prison sentence. If found guilty, Dery could be returned to prison and banned from holding public office for at
least seven years, Feinberg said.
This article originally featured in Tax Analysts: “Israel’s Interior Minister Faces Indictment for Tax Evasion,” by William Hoke, TNTI, Jan. 12, 2021