Shas Leader Dery's Brother to Plead Guilty to Tax Fraud in Plea Bargain

Shlomo Dery will plead guilty to three cases related to tax evasion, including aiding his brother Arye by claiming his income from a U.S. investment fund as his own

Aaron Rabinowitz
Aaron Rabinowitz
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Shas leader Arye Dery at Shas party meeting, in February.
Shas leader Arye Dery at Shas party meeting, in February. Credit: Ohad Zwigenberg
Aaron Rabinowitz
Aaron Rabinowitz

The State Prosecutor's Office indicted on Sunday attorney Shlomo Dery, brother of Shas chairman Arye Dery, as part of a plea bargain.

Dery will plead guilty to violations of the Income Tax Ordinance and the Land Taxation Law, and in return the prosecution will seek a sentence of nine months in prison to be served in community service, as well as a 280,000 shekels ($87,000).

The indictment charges Dery with crimes in three cases. In a real estate deal with his brother Arye, he is charged with filing a false contract, declaring a lower sale price than actually agreed – 4.25 million shekels rather than 5.8 million – to pay less purchase tax.

In the second case, Dery is charged with omitting his holdings in foreign companies that own real estate in Germany from his annual tax reports for the years 2007 through 2014, and his financial disclosures from the years 2007 and 2011, so as not to pay tax on his income from these holdings.

In the third case, the indictment charges Dery with aiding his brother Arye by claiming his income from American investment fund Green Ocean as his own, once Arye returned to politics in 2013.

According to the indictment, in 2011 Arye Dery received commissions from the fund for services he rendered. In 2013, upon returning to political life, the Shas chairman ordered the fund to transfer money he was due, some 630,000 shekels, to his brother Shlomo. Thus, from 2013 to 2015, the commissions were paid to Shlomo Dery’s law firm and reported to the tax authorities through that firm’s filings.

Sharon Kohane, from law firm AYR representing Shlomo Dery, said, “In the totality of circumstance, this is an appropriate plea deal and the correct and just way to end the process pertaining to him. A large part of our arguments at the preliminary hearing were sustained, and the prosecution chose to charge our client with a limited indictment, ending the affair with a proportionate penalty, suitable to his part in the affair.

"Let us stress that this is a one-time error, which took place about a decade ago, and that the suspicions of ethical violations – the subject of lengthy six-year investigations – evaporated and proved to be baseless.”

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