Petah Tikva Court Sentences Contractor to Prison for Major Tax Fraud
A Petah Tikva court sentenced contractor Daoud El-Hi to nine months in prison and fines for a 2 million shekel fictitious invoice tax fraud scheme conducted in 2017.
Petah Tikva Court Sentences Contractor for Tax Fraud
The Petah Tikva Magistrates' Court recently sentenced contractor Daoud El-Hi and his construction company to nine months in prison and financial penalties for severe tax offenses committed in 2017.
According to the verdict, between June and November 2017, the construction company received eight fictitious invoices totaling approximately 2 million shekels from a legitimate company without any actual transactions taking place. Daoud El-Hi, a director and shareholder, deducted input tax amounting to about 300,000 shekels from these invoices.
Scheme Involving Hijacked Company and Cash Laundering
The court revealed that El-Hi collaborated with Mordechai Plotzer, who was convicted last year of issuing the fraudulent invoices. Plotzer had hijacked a company without its owners' knowledge and used it to issue the bogus invoices to El-Hi's firm, receiving a 3% commission on each invoice.
To conceal the fraud, checks were issued to the hijacked entity and recorded in the bookkeeping records. Part of the cash was funneled through financial service providers and returned in cash to El-Hi, while other portions were used to pay unregistered workers and contractors.
"The court took into account the defendants' failure to accept responsibility and the lengthy trial, alongside the full removal of the financial default." - Court Verdict Excerpt
Final Sentences Imposed
In addition to the nine-month prison sentence, Daoud El-Hi was ordered to pay a 50,000 shekel fine, and his company received an identical fine. Procurement manager Nader El-Hi was sentenced to 100 hours of community service and a 10,000 shekel fine.
