Shas Leader Dery Convicted of Tax Offenses as Part of Plea Deal

Arye Dery, who is accused of tax evasion and has resigned his Knesset seat, will pay a 180,000 shekel fine and receive probation time

Chen Maanit
Chen Maanit
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Shas leader Arye Dery in Jerusalem court, on Tuesday.
Shas party leader Arye Dery in a Jerusalem court, on Tuesday.Credit: Ohad Zwigenberg
Chen Maanit
Chen Maanit

A Jerusalem court agreed Tuesday to a plea agreement in which the leader of the ultra-Orthodox Shas party Arye Dery, a former cabinet minister, admits to charges of tax evasion.

According to the plea bargain, worked out by Attorney General Avichai Mendelblit and Dery’s lawyers, Dery was given a year's suspended sentence and fined 180,000 shekels ($57,000). The judge in the case is Jerusalem District Court Judge Shmuel Herbst.

In response, Dery said that he “accepts full responsibility” for his actions and that “the plea deal was made voluntarily.” Dery deplored his treatment in the media, however, and the yearslong legal proceedings.

The state representative at the hearing, Yaron Golomb, said Dery's role as an elected official put him in a position of responsibility: "An elected official should be a beacon for the general public to look up to for guidance, and certainly should not break the law he is legislating." Golomb noted favorably Dery's decision to resign from the Knesset.

Dery’s lawyer Navot Tel Tzur meanwhile criticized the state's conduct in the case. "This phenomenon where a person is questioned for years on serious suspicions and at the end of the day it turns out that there is nothing in the suspicions and then he is prosecuted for tax offenses, is an incomprehensible incident. It is a violation of human rights and of public trust in the legal process," he said.

Dery submitted a notice of resignation from the Knesset at the beginning of the week, which takes effect on Tuesday. That spares the court from having to decide whether his violations of the law constituted moral turpitude. Such a finding would disqualify Dery from again serving as a cabinet minister or a Knesset member for seven years. According to understandings worked out between the two sides, the issue will only be considered in court if Dery seeks to again serve in a senior public position.

The indictment to which Dery has agreed accuses him of failing to report the full proceeds of an apartment that he sold to his brother Shlomo Dery, thereby evading taxes on 1.55 million in income. Dery will also be charged as part of the agreement of failing to report income from the U.S. American financial firm Green Ocean on which he should have paid 530,000 shekels in tax.

The Movement for Quality Government in Israel filed a petition with the High Court of Justice challenging the decision not to impose a finding of moral turpitude as part of the plea agreement, but last week the court denied the petition. The organization claimed that failure to address the moral turpitude issue was extremely unreasonable in light of the fact that Dery had previously been convicted of corruption while he was a public official. He was convicted of bribery and fraud in 2000 and served 22 months in prison.

In its ruling last week, the High Court ruled that the issue was only theoretical since Dery is not currently a cabinet minister and had also committed to resign from the Knesset.

Dery, who is to remain at the helm of the ultra-Orthodox Shas party, had also been suspected of registering a family vacation home in his daughter’s name and of submitting false reports on real estate transactions that he carried out in Jerusalem to evade hundreds of thousands of shekels in tax. He was also suspected of receiving about 200,000 shekels from businessman Ilan Sharabi without reporting it and of then dealing as a public official with an issue involving Sharabi.

In 2018, however, Attorney General Mendelblit rejected a police recommendation to charge Dery with fraud, breach of trust, obstruction of justice and false statements under oath. At that point, the suspicions against him were limited to the tax evasion allegations.

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