Israel Tax Authority Employees Arrested in NIS 80 Million Bribery Investigation

Lahav 433 Arrests and the Tax Authority Investigation

The investigation centers on allegations that employees of the Israel Tax Authority accepted bribes in exchange for processing fraudulent tax returns. According to police, the scheme resulted in an estimated NIS 80 million being paid out illegally. Investigating Lahav 433 forces carried out four arrests at the suspects’ homes and offices. The group includes three former employees, while one individual had still been serving as an assessment team coordinator in Petah Tikva at the time of their arrest.

Haim Biton and Ongoing Misconduct Inquiries

The Tax Authority case is not the only high-profile corruption probe currently involving Israeli officials. Last week, Shas MK Haim Biton was questioned by Lahav 433 as part of supplementary investigative proceedings into his alleged misconduct and use of public funds to finance a haredi (ultra-Orthodox) newspaper. Investigators are looking into claims that Biton, while serving as the director general of the Ma’ayan HaChinuch HaTorani education network about seven years ago, used funds from the network to finance a private Shas-affiliated newspaper.

The case involving Biton has been handled by Lahav 443 over the past year. Authorities anticipate transferring the findings soon to the state attorney and attorney general, who will ultimately decide whether to file an indictment in the affair.

International Parallels in Corruption Enforcement

While the Israeli investigations focus on domestic tax and education funds, similar efforts to combat public sector corruption are playing out elsewhere. The European Public Prosecutor’s Office (EPPO) announced on Thursday, May 7, that it had arrested 21 Croatians, including an acting and a former public official, in a probe into possible corruption and fraud involving European Union farm subsidies. The head and a former expert adviser of a payment agency of agricultural funds in one of Croatia’s counties were among those arrested on May 6 in coordination with local police and Croatian tax administration authorities for suspected abuse of office and authority and receiving bribes, the EPPO said in a statement.

The EPPO, which began operations in 2021, is the EU’s independent public prosecution office tasked with investigating and bringing to judgment crimes against the bloc’s financial interests. It first announced the investigation into the alleged Croatian corruption on Wednesday. The acting public official under arrest is suspected of coordinating with farmers to help prepare, submit, and secure applications for EU farm subsidies under potentially irregular circumstances, in exchange for illicit financial benefits, the EPPO said on Thursday. It added that a former expert adviser was suspected of having set up a criminal gang with two other suspects to help farmers obtain farm subsidies by inflating the value of pastureland and falsifying documents in return for financial rewards since 2020.

Croatia’s interior ministry confirmed on Thursday that police had investigated 21 persons over suspected organised fraud, abuse of position, and corruption after it found irregularities in the allocation of EU farm aid. Upon completion of the criminal investigation, the suspects were remanded in custody while criminal charges were filed with the European Public Prosecutor's Office against a total of 21 persons, the interior ministry said in a statement. The arrests followed a scandal in Greece over suspected fraud similarly related to EU farm subsidies that has shaken the centre-right government in recent months.

Broadening Scope of Israeli Enforcement

Beyond the Tax Authority and education network inquiries, law enforcement has been active in other sectors. In what has been described as the longest undercover operation in Israeli police history, an agent codenamed “Jack Sparrow” revealed millions of dollars in illegal activities, including smuggling luxury goods, counterfeit items, and even weapons concealed in creative ways. Following these findings, the port chief distanced the port from the scandal involving customs workers.

The Tax Authority investigation remains active, as Lahav 433 continues its work following the initial arrests. Efrat Forsher contributed to this report.

Sources: Jpost, Reuters.