Ex-IPS Officer Convicted in Lod Court Over Multi-Million Shekel Corruption Case

The Central District Court in Lod convicted Arkady Shchovitsky, a former construction officer for the Central District of the Israel Prison Service (IPS), on Monday on multiple counts of bribery, theft by a public servant, and money laundering as part of the "Silver Cage" affair that began in 2020.

Court Findings and Corruption Scheme

In its verdict, the court ruled that Shchovitsky exploited his authority and the dependency of contractors who won IPS tenders to establish a corrupt modus operandi. Within this framework, he dictated the identity of subcontractors to perform work at IPS facilities, influenced pricing, and occasionally ordered inflated price quotes beyond their actual cost to unlawfully secure additional profits for himself and the contractors.

"The defendant systematically exploited his public position and the reliance of contractors to construct a mechanism of illicit enrichment at the expense of state resources," the court noted.

In certain cases, Shchovitsky even took possession of checks intended as payments for subcontractors, thereby tightening his control over them. Among other things, he demanded that price proposals be increased so he could pocket funds, and he also carried out private renovation work at his home, partially funded by the IPS budget.

Convictions and Tax Offenses

Shchovitsky was convicted of receiving bribes and theft by a public servant totaling approximately 350,000 shekels, as well as money laundering offenses. Additionally, he was convicted of tax offenses related to unreported bribe and theft income, as well as omitted rental income from numerous properties.

Arkady Shchovitsky and his wife, Natalia Shchovitsky, rented out multiple properties and failed to report the rental income to the Tax Authority. Consequently, both were convicted of tax offenses.

The verdict, spanning more than 300 pages, was delivered following a lengthy legal process that included 25 evidentiary hearings and extensive testimony. The court partially acquitted Shchovitsky on one charge and another specific indictment, while categorically rejecting his claims of a "staged case" or harassment by IPS officials.

Indictments were filed against seven other defendants in connection with the affair, all of whom have been convicted according to their respective roles in bribery and money laundering.