Former Top Israeli Tycoon Starts Three-year Prison Sentence for Fraud, Graft

'It's a tough day for me and my family,' says Nochi Dankner, whose appeal against the length of his sentence was rejected by the Supreme Court

Nochi Dankner at the entrance to Maasiyahu Prison, Ramle, Israel, October 2, 2018.
Ofer Vaknin

Nochi Dankner, who only a few years ago was one of Israel’s most powerful businessmen, entered prison Tuesday morning to serve a three-year term for manipulating the share price of IDB Holding Corp. as his business empire was crumbling under the weight of debt.

Dankner arrived at the minimum security Maasiyahu Prison near Ramle three weeks after the Supreme Court not only rejected his appeal but lengthened his term from two years. 

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Nochi Dankner en route to Maasiyahu Prison, October 2, 2018.
Nir Keidar

Arriving by car, Dankner refused to answer questions from reporters before rushing into the prison gates. But he did make a short, apparently prepared statement: “This is a difficult day for me and my family. I fought for my innocence. I believe in God that everything is for the best. I trust the judicial system and I love the State of Israel very much.”

Dankner was convicted more than two years ago by the Tel Aviv District Court of manipulating the price of IDB shares, together with an associate, Itay Strum, in February 2012. The two were convicted of trying to boost the price ahead of a secondary share offering.

Dankner, the court said, had sought to maximize the amount IDB raised in the offering by buying up shares in the market with the help of millions of shekels of loans he  arranged from First International Bank of Israel. Dankner associates helped by buying shares from Strum, enabling him to go back to the market to buy more.

In the end the offering raised 320 million shekels ($88 million at the current exchange rate), but Dankner still lost control of the IDB group to its creditors a year later. He was indicted in 2014.

A spokesman for the prison service said it had not been decided whether Dankner would serve in the prison’s Block 10, which is reserved for VIP inmates and has housed, among others, former Prime Minister Ehud Olmert and Dankner’s cousin, Danny, a former chairman of Bank Hapoalim.

The Supreme Court also increased Strum’s sentence from one year to two, and he will start serving his sentence Sunday.