A Little Bank Called Revizada

Benny Revizada, "the king of the gray market," first became known to the public following the revelation of Etti Alon's grand embezzlement scheme, in which some quarter of a billion shekels was stolen from the Trade Bank and its clients. In June 2002, the Tel Aviv District Court indicted Revizada, 50, for stealing NIS 144 million from the bank. Evidence is currently being heard at his trial, which is taking place before Judge Uri Shoham.

However, about a year before Revizada was indicted in the Trade Bank case, another serious indictment was issued against him - in the Tel Aviv Magistrate's Court - for tax evasion totaling tens of millions of shekels. Last week, his trial in the tax evasion case neared its conclusion: Judge Judith Amsterdam convicted him of five counts of fraudulent use, deceit and plotting to evade taxes. The maximum sentence for each crime is seven years in jail.

During the trial, it was revealed that Revizada ran operations on a bank-like scale: From 1995 to 1998 he deposited checks totaling some NIS 2 billion through his check turnover and loan operations. In order to deposit the checks, he used 15 bank accounts, some of which were not even in his name. His residence and cars were also not registered as his.

At the height of his business operations, Revizada deposited between 3,000 and 4,000 checks a day via a company he controlled. He ran his business out of a bus that had been converted into a trailer and roamed around South Tel Aviv. Eli Morad, who has worked with the accused since 1990, testified how the financial crimes were carried out. In some cases, he said, Revizada waited for him in his converted bus at the Herzliya Junction, near the traffic light. Morad arrived there by moped. He received from the accused the details of the client's car he would approach first. Morad would take checks from clients there and give them a sealed envelope containing cash. For postdated checks Revizada usually charged a monthly interest of 2.5 to 3 percent, and for cash checks, he took a commission of 0.25 to 1 percent.

No one disagreed during the trial that Revizada did not handle his accounts in an organized manner and did not declare his assets. In his testimony he argued, "I did not have a system built to handle such a large mass of checks. By nature, when it comes to money it is hard to bring in people, who may steal. I want to add that I have been chasing after the tax authorities for seven or eight years now, since 1997 or 1998, and want to meet with them."

Revizada was caught in several contradictions: He confirmed that he used a bank account registered in his niece's name, but also said the account was inactive. During the trial it was revealed that NIS 35 million worth of checks were deposited in this account. The importance of the verdict goes beyond the case of one serious tax offender: It sheds light on the particularly lenient deal the accused worked out with the VAT authorities before the Income Tax Authority began investigating him, as well as on an abortive attempt to manipulate a senior Income Tax Authority official to work on his behalf.

In April 1997, the agreement between the accused and two senior VAT officials was drawn up: the regional director of the VAT Tel Aviv office in Jaffa, Yehezkel Rafael, and the head of the oversight department, Avraham Kalif. In the valuation agreement, it was agreed that the accused would pay NIS 700,000, including a fine of NIS 100,000. According to Avraham Arditi, former deputy director of investigations at the Tel Aviv VAT office, the agreement was "sealed by the department's most senior echelon, the customs director or the deputy director of oversight. ... It was important to reach an arrangement and get a hold of the money, otherwise there was concern that no money would be obtained from this case."

Judge Amsterdam, who was recently chosen to be a district court judge, ruled that the VAT officials rushed and agreed with the accused on this sum when it was clear to them that the accused did not maintain orderly accounting records. The judge added that Rafael was aware that the fine set in the valuation agreement was inaccurate and incorrect, but described it as "appropriate and satisfactory to us" in order to be spared the effort of conducting a thorough investigation.

The judge wrote, "The valuation the VAT office conducted was done over the course of a few hours, according to a `breakdown' based on the accused's statements." In her critique of the VAT officials, she added that their valuation was surprisingly lower than it should have been, and given that there was no in-depth investigation, the VAT authorities were not aware of other bank accounts that Income Tax Authority investigators uncovered.

A history of dealings

The very lenient agreement Revizada arranged with the VAT officials in 1997 was not his first: In the 1989 and 1990 tax years, he also did not file tax returns and twice paid fines totaling NIS 250,000 for business activities amounting to NIS 50 million.

The Income Tax officials working on the current case were more aware of the traps lying in wait for them. But Revizada, a seasoned trader, tried to get around them with the help of Shimon Cohen - the chief collector at one of the Tel Aviv assessment offices. In an attempt to help him, Cohen more than once turned to Income Tax Authority employee Iris Omer, who was handling Revizada's case. Defense attorney Moshe Israel called Cohen, who retired several years ago, to testify to show that Revizada demonstrated goodwill and sought to reach an agreement with the Income Tax Authority. The meeting between Cohen and the accused was arranged through a middleman named Sarit, who worked at a bank where the accused had an account.

Cohen was cross-examined by prosecution attorneys Rachel Gur-Aryeh and Ram Naor. Naor asked Cohen how he could agree to meet with Revizada, who had not even filed a tax return, a prerequisite for producing a valuation. Cohen said, "I did not see, I did not look into and I also did not question the accused about this matter." Prosecutor: "When you were approached by this same Sarit, weren't you interested in knowing which assessor was handling him [Revizada]?" Cohen: "No." Prosecutor: "How did she [Sarit] explain the desire of this anonymous individual [Revizada] to meet specifically with you?" Cohen: "She didn't explain anything. She said she had a friend and asked me to hear him out. She said it had to do with tax matters." The judge ruled that the circumstances of Revizada and Cohen's meeting were surprising.

In her verdict, the judge ruled that according to the law, she could convict the accused of tax evasion even without determining the precise amount he failed to pay. The defense attorney, however, told reporters after the verdict that in his opinion, the evaded sums amounted to NIS 5 million, while the prosecution cited figures of NIS 30 million to 70 million. Meanwhile, Revizada was arrested several days ago as a suspect in a new case of money laundering and concealing income.

Attorney Israel is now racing against the clock, seeking to expedite an arrangement with the Income Tax Authority before Judge Amsterdam issues her verdict in a few days.