Former Chairman of Top Israeli Bank Sentenced to a Year in Jail for Fraud

Court also hands Danny Dankner, ex-chief of Bank Hapoalim, a suspended sentence and a $285,000 fine following a plea deal.

Jasmin Gueta
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Former Bank Hapoalim Chairman Danny Dankner was sentenced on Thursday to a year in prison after pleading guilty to reduced charges relating to misconduct during his time at the bank. Dankner was also given a fine of 1 million shekels ($285,000) and a one-year suspended sentence, following a plea agreement by the Tel Aviv District Court.

As part of the plea bargain, Dankner admitted to several counts of fraud, corporate breach of trust, receipt of property through subterfuge and breach of banking governance standards.

Prosecutors had sought an 18-month prison sentence, along with a suspended sentence and a million shekel fine. Dankner’s defense had asked the court to suffice with a fine.

“Dankner committed his acts of breach of trust as chairman of the board of Bank Hapoalim – one of the most important jobs in the Israeli economy and one of the most influential,” said prosecutor Maor Even-Hen in court. He added that every one of the acts Dankner admitted to showed he used his position to advance his personal interests through his work at the bank.

During the court session, Dankner apologized for his actions and expressed deep regret over the affair, saying he has been taking responsibility for the actions listed in the amended indictment reached through the plea bargain.

At the same time, he said the stricken charges of money laundering, receipt of property through fraud and bribery had always been baseless.

During his court appearances, Dankner usually dressed simply in a button-down, open-collared white shirt and black trousers, accompanied by a battery of lawyers. As he sat on the defendant’s bench, he would occasionally make a note on the papers folded in front of him, but most of the time he looked down at the floor, studied the witness in front of him, or sent looks to his attorneys.

Dankner’s attorneys claimed during the entire proceedings that their client had committed no crime. “This man was not born a banker, he was born a farmer,” attorney Navot Tel Zur told the court, adding that although his client’s conduct not been “attractive, it was not criminal.”

However, the day Dankner was to have taken the stand himself to be cross-examined by the prosecution, he decided to admit to certain charges in a plea bargain. The money-laundering charge, which had carried the most severe penalty, was dropped.

During the penalty phase of the trial, Dankner requested permission to address the court. In addition to apologizing for the actions to which he had admitted, Dankner said those that had eventually been dropped were widely reported, "causing me irreparable damage, psychologically and economically. If not for those accusations, which were found baseless, I would not have resigned my senior position.”

Judge Zvi Gurfinkel responded that he did not take lightly Dankner’s admission of responsibility and his personal and familial circumstances, but said it was his duty to denounce Dankner’s actions and send a message.

In his plea, Dankner admitted to making a deal where Hapoalim paid the investment fund RP Group $25 million for a stake in the Turkish BankPozitif at a time when the fund was conducting business with Elran Investments – a company owned by the Dankner family.

In a second incident for which he was convicted, Dankner led the bank to acquire shares in BankPozitif from Turkish businessman Halit Cingillioglu. At the same time, Dankner gave an unsecured loan of 5 million euros to Cingillioglu, without disclosing this to Hapoalim.

Dankner served as a director on Hapoalim’s board from 1997 to 2004. In January 2004, he was appointed deputy chairman before being asked to step down and return to being a board member in May, at the demand of the Bank of Israel’s banks supervisor.

In June 2007 Dankner was appointed chairman of the bank, a role he filled until July 2009, when the central bank forced him to resign.

Dankner’s cousin Nochi Dankner lost control of Israel’s largest holding company, IDB group, this week in a separate court decision.

Danny Dankner, former chief of Bank Hapoalim, at court, December 19, 2013.Credit: Tomer Appelbaum
Danny Dankner in the Tel Aviv District Court, December 19, 2013. Credit: Tomer Appelbaum