Israeli Film Mogul Arrested for Tax Evasion

Yoram Globus of Globus films allegedly failed to report NIS 26 million to the tax authorities; is released from jail on NIS 1 million bail and may not leave Israel for 180 days.

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Film mogul Yoram Globus was arrested Tuesday for allegedly withdrawing NIS 26 million from his film distribution companies without reporting the sum to the Israel Tax Authority. He was brought to Tel Aviv Magistrate’s Court for a remand hearing on Tuesday. On the strength of an agreement between both sides, Judge Tirtsa Shacham Keinan ordered that Globus be released on NIS 1 million bail. In addition, he may not leave Israel for 180 days.

Globus owns and operates a slew of movie-related business, ranging from film distribution, theater management and film production. He owns the Globus film distribution company, which he controls together with the foreign company Rialto Establishment, which he also owns.

According to the request to extend his remand, “An examination of the Globus case revealed that he withdrew about NIS 13.2 million from Globus Films, and through the company known as Busch Establishment he withdrew an additional sum of about NIS 13.5 million." The request also read, “Globus never reported these withdrawals, whose balance remained unchanged for several years as dividends, nor did he report theoretical interest as income in his personal portfolio.”

In addition, the Tax Authority claims that when Globus made the withdrawals, the company stopped submitting annual reports to the Income Tax Authority. Instead, its parent company, Rialto, notified the tax authority that the Globus Company was inactive. “For all practical purposes, the Globus Company stopped submitting annual reports, starting with the 2003 fiscal year,” his arrest warrant read in part.

The request also stated that in 2007, Rialto transferred the whole amount to shaky debts, and the sum was wiped from the balance. “That was how Rialto’s reports, from 2008 on, have no mention or tracking route for the funds, and since the Globus Company did not submit annual reports, all the money went into Globus’s pockets with no tax payment or trace,” Tax Authority officials said.

The Tax Authority’s investigation revealed that Globus did not notify his accountant about the withdrawals, thus evading reporting income. Under questioning at the Tax Authority, Globus said, “I wish to tell you that I know that if I take money from a company, it is like a loan from the bank, and interest charges apply.”

An open investigation against Globus and several other parties involved in the affair  began Tuesday, and his home was searched. Globus refused to comment on the report.

Globus is a high-ranking film producer in Israel and the United States. Among the films he produced in Israel are the Oscar-nominated "Sallah Shabati," and the beloved cult series "Lemon Popsicle." In the late 1970s he worked in Hollywood, established The Cannon Group, produced many films and owned a chain of movie theaters.

Film mogul Yoram Globus.Credit: Itzik Ben-Malki

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