Brothers Itzik and Amir Dayan were arrested on suspicion of evading hundreds of millions of shekels in income

Brothers Amir and Itzik Dayan, two of the richest men in the economy, who usually try to stay under the radar, are suspected of tax evasion of tens of millions of shekels and also cheated the tax authority and hid income of hundreds of millions of shekels from it. This is how the publication was allowed today.

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The suspicion attributed to them is that they presented a false presentation according to which assets amounting to hundreds of millions of shekels are held in trust by an elderly French resident, who vehemently denies this, all in order to evade tens of millions of shekels in tax payments in Israel.

The two were arrested in early November for questioning, and spent two days in custody, for fear of disrupting proceedings. In their investigation, they denied the suspicions attributed to them and claimed that this was a civil-professional dispute that had been going on with the tax authority for many months, regarding the amount of tax assessment they had to pay to the state. According to them, the state’s decision to transfer the dispute to the criminal level, including their arrest for questioning, was forceful and unjustified. And they are convinced that the story will eventually end in a financial settlement with the tax authority.

Amir and Itzik Dayan were questioned as suspects. The eldest brother in the family, Mickey Dayan, was invited for questioning as part of the investigation and to testify. In addition, other elements from the Dayan family testified in the affair, including Amir Dayan’s ex-wife, with whom he is in conflict.

As part of the agreements reached by the judges with the tax authority upon their arrest, the parties asked the court, in a special exception, to issue a restraining order on the publication of the names of the suspicious brothers for 45 days while they will be detained for two days for interrogation. Now, only after a petition by Calcalist, to be represented by attorneys Tamir Glick and Bar Laudon from the law firm of Lieberich Mozer, along with other media outlets, were the names of the brothers allowed to be published. This is after a hearing in two courts – in peace and in the district.

Tel Aviv Magistrate’s Court Judge Anat Yahav and Tel Aviv District Court Judge Maayan Ben-Ari ruled in their decisions that there was a reasonable suspicion of committing the acts attributed to the suspects, justifying the publication of their names, and ruled that the publicity of the hearing

In its decision of December 10, Judge Yahav ruled that the Dayan brothers “did not meet the required threshold for the ‘serious damage’ expected from the publication of their details, given the suspicion that is sufficiently well-founded at this stage and in the public interest.” The two appealed this decision to the district court, through attorneys Nati Simchoni and Haim Gabay. Judge Ben-Ari dismissed the appeal, ruling in a Dec. 15 decision that it was important to inform the business community of the suspicion against the two that justified the publication of their names: “The appellants have failed to prove that prevention of harm is preferable to the public interest Economic and potential customers regarding the suspicions. ” She delayed the performance until today (Thursday) at 13:00.

Right: Amir Dayan and Itzik Dayan Photo: Alexander Korner Uriel Cohen

Covert investigation in Israel and abroad and fear of disrupting an investigation

The suspicions against Amir and Itzik Dayan are the result of an undercover investigation by the International Taxation Unit of the Tax Authority and in cooperation with the Holon Assessing Officer, the Tel Aviv Assessing Officer and the Prohibition Authority. money laundering, And includes interrogations carried out both in Israel and abroad. The interrogation became public on November 9 with the arrest of the two, for fear of disrupting interrogation proceedings, and seizing their computers.

The tax authority suspects that Amir and Itzik Dayan did not report much income from a mutual fund established in 2001, which they benefit from, although a tax settlement was made between them and the authority regarding the same fund in 2014. The creator of the trust is a 90-year-old French citizen named Jacques Malka. The father of Itzik Dayan’s ex-wife. According to the suspicion, at the stage of arranging the payment of the tax on the mutual fund, the Tax Authority did not receive full information on the source and amount of the funds and now the two are suspected of having committed serious tax offenses under section 220 of the Income Tax Ordinance. On the other hand, the judges claim that when this trust entered into an arrangement with the tax authority in 2014, all the relevant documents and information were presented to the tax authority and an orderly tax assessment was made, and the tax was paid to the state.

As stated, on November 9, the Tel Aviv Magistrate’s Court issued a restraining order on the affair for 45 days (which is now shortened following the media petition), as part of an arrangement reached by their lawyers with the tax authority, according to which they will be detained for two days. A restraining order will apply. In addition, it was agreed that the two will be released on restrictive conditions, including a bank guarantee of NIS 300,000 each, and a third-party guarantee of NIS 250,000 for each. The Arabs were the other brothers in the family: Avi Dayan and Yaakov Dayan. In addition, it was agreed that the passports of Amir and Itzik Dayan would remain with the tax authority for 180 days, but they would be able to fly abroad and apply for the passport for that purpose. Indeed, Amir Dayan flew to Germany to run his business.

Acquaintances familiar with the details of the suspicions against the two said this week that “this is an event that is inflated beyond all proportion due to a divorce dispute. The story has been in civil proceedings with the tax authority for over a year on the same issue, and has become an investigation. The tax authority needs to investigate the allegations.” Of Amir, but there is a lot of incorrect information that is published. “

According to relatives, “The family is calm and confident that when the fog dissipates it turns out that the noise was excessive, and that they did nothing wrong. It’s just a dispute over moles with the tax authority. They made sure to work very neatly in every area, and certainly in taxation. The best advisers in Israel and in the world in the field of taxation, and believe that they will reach an understanding with the tax authority. ”

 Photo: Alex Komolowski

“Civil dispute that has escalated into the criminal realm”

At a hearing held in the Tel Aviv Magistrate’s Court as part of the proceedings to remove the restraining order, Adv. Tamir Glick said that “restraining orders without any reasoning are something that should have long since disappeared from the world … Agreement between the tax authority and the suspect that included a restraining order Is a consent that has no weight. She is suing the court. The parties may not waive on behalf of the public the public’s right to know. It is possible that at some point in time both parties will be restrained from publishing, but the court, according to consistent and new rulings, is not supposed to approve such transactions. “

Tel Aviv Deputy Assessing Officer Yoni David said at the hearing that “for us, the default is advertising. This is the initial default. As a balance between the considerations of the investigation and other interests, we agreed to postpone the publication by 45 days, after which of course the only default is publication. But, we have reached agreements and we as an authority need to sharpen the agreements we have reached. ”

Adv Adv. Haim Gabay

Adv. Haim Gabay (former deputy director of the Tax Authority), representing Itzik Dayan, argued at the hearing that the intensity of the suspicions in the case is low. According to him, in June 2015, an assessment agreement was signed in the case of Malka Trust (the name of the trust through which the judges are suspected of concealing the funds) in the Tel Aviv 3 Assessing Officer and the trust representative, and its taxation was arranged following the series in the trust field issued by the Tax Authority in 2014. Previously not Musso), in which the authority levied tax at rates ranging from 3% -6% on trusts depending on whether the creator is alive and more.

“In our case,” he said, “this trust, too, when it became known that there was an obligation to settle the taxation, approached the tax authority, flattened everything the tax authority requested under the arrangement, produced documents on all the assets, and reached a tax result. The tax result was paid when the trust was examined “Before and before. In the arrest request, my friends claimed that the assessee was wrong. He could have corrected this mistake … Since 2015, the trust has submitted reports on time and paid the required tax … Everything they said to the trust or everything they determined to the trust – the trust paid.”

Adv Adv. Nati Simchoni Photo: Yariv Katz

Advocate Nati Simchoni, representing Amir Dayan, said at the hearing that “it is clear to Koli Alma that this is a civil dispute that has been going on in the tax authority for several months. Only now has he rolled into the criminal realm. In our humble opinion, he should stay in the civilian hostel. “Simhoni added at the hearing that the catalyst for the Tax Authority’s investigation stems from the proceedings between Mr. Amir Dayan and his ex-wife, with whom he is in conflict.

As stated, Justice of the Peace Anat Yahav, who lifted the restraining order in her decision, ruled that the damage that the judges claim may be caused to them as a result of publishing their names is not unusual and different from any other case: “I did not find the damage presented to me to fall under the exception. The publicity given is different from any other suspect whose good name is as important to him as his real body. ”

“Agreeing to ban the publication for 45 days was as part of a package given”

At a hearing held on appeal by the judges to the district, the defense attorneys of the two again argued that the publication of their names should not be allowed, before the end of the 45-day consent period they reached with the tax authority. Adv. Gabay reiterated regarding the foreign trust that “it turns out that this is a foreign trust but they converted it because the beneficiaries are residents of Israel. The beneficiaries are the suspects currently being investigated … The obligations to impose the report as well as the payment of the tax applied to the creator, theloyal. They never obligated the beneficiaries that they were not a party to the matter … In 2014, as soon as the obligation arose to submit a report, they hired the services of lawyers, contacted the tax authority, presented all the documents in their possession or were asked to produce and collect … The tax rate was “It is very low, and that is exactly the intensity of the suspicion and this is the weakness of the suspicion … Even at the arrest stage we heard in court that the assessee was wrong, the mistake could have been corrected. This mistake is not a substitute for a criminal thought for a crime.”

Advocate Noga Blickstein Black, who represented the state at the hearing, said: “We claim there is a reasonable suspicion. The consent to the 45-day ban on publication was as part of a package provided and also for the purposes of the investigation. At this stage, there is no investigative need, and that is only because we are behind the agreement. ”

Advocate Glick countered: “In accordance with the Courts Act there is a provision that sets out the 48 Hours Act. Every day and every hour that passes and the ban on advertising remains in place, it is a privilege that is against the law. This is a case that does not even scratch the bottom of the few and isolated cases where the courts granted suspects’ requests on the grounds of serious harm to the suspect … If there was agreement between the parties in the hearing, it is a scandal … the fact that (suspects) define themselves as having status in the Israeli economy. “This is to put them in the box of a public figure, when we know they are tycoons, and if I want to rent or buy a car, I support them, if I want to stay in a hotel I support them … The justice system has to do one thing between tycoons and the common man.”

As stated, District Judge Maayan Ben-Ari, who rejected the appeal, ruled: “As appears from the secret report of the investigating unit which was submitted for review … it is difficult to determine that there is no reasonable suspicion as required for this stage of the proceedings. Although it does not appear that this is a crime for which there is necessarily a public interest in advertising in order to motivate additional victims to complain, I accept the respondents’ claim (media) that it is important to inform bankers and potential customers about the suspicions. And the manner in which it was alleged. ”

In addition, Judge Ben-Ari ruled regarding the agreements between the Tax Authority and the Dayan Brothers regarding the 45-day ban on publication during the extension of their detention: “In my opinion, this cannot override the general principles and provisions of the law. As is well known, the court is not obliged to adopt such an agreement.” And the public’s right to know. ”

Attorneys Nati Simchoni and Haim Gabay responded today: “Amir and Itzik Dayan are respected businessmen who have never been blamed. The issue examined by the tax authority – which originates in a divorce dispute – is complex and the Dayan brothers will be presented, in its context, by the best experts. Due to this, it was appropriate that the issue be examined at the civil level only. “Amir and Itzik Dayan are working in transparency and full cooperation with the tax authority and are sure that at the end of the investigation it will become clear that there was no fault in their conduct.”

This is how the judges made their fortune

Amir Dayan (46) is the youngest of 12 brothers and sisters in the Dayan family (one of the brothers, his uncle passed away unexpectedly a few years ago), and runs his business mostly with his brother Itzik (58), and in some cases also with his older brother Mickey. Amir is considered the “brain” behind the activities of the brothers and sisters, each of which has its own business. He currently divides his time between Germany and Israel.

At the beginning of his career, Amir worked in the family business, headed by the family-owned Sharoni Ceramics chain in Israel, which imports ceramics, granite and porcelain. There he is a friend of his brother Itzik, and since then the two usually go together. They made their breakthrough together in 2008 when they began buying real estate in Germany at low prices that have since risen nearly 20 times, mainly through bank financing and leverage, while improving the assets and raising the occupancy rate. The value of the assets increased and so did the capital of the judges. Which currently own in Europe mainly in Germany, a portfolio of thousands of properties – mainly hotels and offices for rent.

“That’s how they made the most of their fortune,” says a source familiar with the Dayan family’s business in Germany. “They also bought properties with a 50% occupancy rate and were able to fill them almost completely. This is how they earned twice – both from the increase in the value of the conferences and from the increase in receipts from the tenants.”

The family, which usually tries to stay away from media exposure, has made headlines in recent years mainly around its investment in Israel with the acquisition of Africa Hotels, which owns the Crowne Plaza and Holiday Inn hotel chain, from Africa Israel and Hawk. The investment was made in two rounds in 2016-17 for a total of about NIS 1 billion. Today, the chain owns seven hotels nationwide, with 1,695 rooms.

Later, in 2017, Amir and Itzik Dayan together with the American Apollo Fund bought shares in the income-producing real estate company in Germany ADO, under the nose of Sheri Arison, the former controlling shareholder in housing and construction. This was a quick and aggressive move, where the judges recognized a distortion in market price and a successful round. , A move that led to wars of control of ADO and a jump in its share.In 2019, the judges sold their holdings in the company at a huge profit to the German company Adler.

Another opportunity taken by the judges led by Brother Amir was at the beginning of the Corona crisis, in March this year, with the business spin that Yitzhak Tshuva and the Delek Group entered. Dayan acquired the holding of Citibank (approximately 12%) in Delek Drilling of Tshuva, which was put up for sale at an attractive price. Teshuva was furious at the move, but in the end, Median bought back about 7% of the shares, which he sold, of course, at a quick profit. Since the share statement, and today the judges still hold about 4.5% of Delek Drilling shares worth about a quarter of a billion shekels.