Nochi Dankner, the former business tycoon convicted in July of stock manipulation and other securities-related offenses, was sentenced to two years in prison on Monday.
Dankner, 62 — once one of the richest men in Israel — was also given a one-year suspended sentence and ordered to pay a fine of NIS 800,000 ($209,000).
His co-defendant, Itay Strum, owner of a company that manages assets for wealthy families, was sentenced to a single year behind bars, a year’s suspended sentence and a NIS 500,000 fine ($130,760).
The Tel Aviv District Court delayed the execution of the sentence until January 19 to allow Dankner and Strum to appeal.
Both men had been convicted of their involvement in insider trading in the run-up to a stock flotation for Dankner’s holdings company, IDB Group, in 2012.
Dankner had sunk into massive debt with the banks and had met a brick wall trying to raise cash or get further loans.
In an unusually long account of his considerations in the writing of the verdict, Judge Khalid Kabub on Monday cited the damage caused to investors and the public by the crimes, alongside the increasing severity of punishments dealt out for white collar crime in Israel.
Although prosecutors had sought to jail Danker for three to five years, Kabub said that the tycoon’s offenses qualified for 20-42 months in prison and Strum’s for up to 26 months behind bars.
He decided to impose sentences that were “on the low side” of those ranges due to the mitigating influence of the two men’s charitable works.
On the plus side, Kabub noted Dankner’s philanthropic activity to the tune of NIS 40 million ($10.5 million) and “two thick folders” containing hundreds of letters of thanks for Dankner’s generosity, from both high-profile individuals and regular citizens who had fallen into distress.
He also noted 52 letters and character recommendations received for Strum from senior navy commanders and other public figures.
Dankner, said Kabub, was “a businessman whose talents had taken him to the great heights” but whose “world collapsed” when he plunged into personal debt.
His actions were not a “one-off,” though, the judge asserted, and the sums invested in share purchasing were not low — NIS 42 million ($11 million) according to the prosecution and NIS 20 million ($5.2 million) according to the defense. The share float had been aimed at raising NIS 324 million ($85 million).
As for Strum, the judge said he had found it hard to pinpoint a motive. Strum was a talented businessman who had sought to cultivate a friendly relationship with Dankner. “It appears that Strum’s resolve to help others was what ultimately got him into trouble.”
During the trial, Dankner did not deny his “failures and poor decisions,” but tried unsuccessfully to convince the court that his actions had not been criminal. He tried to put much of the blame for IDB’s collapse on reforms in the cellular market introduced by Finance Minister Moshe Kahlon in his previous cabinet role of communications minister.
Zionist Union MK Shelly Yachimovitch tweeted immediately after the sentencing that “Dankner’s sentence needs to be shared with regulators, politicians, bankers, journalists and city council heads who didn’t prevent him from robbing the public and who worshiped him.”
Danker was the controlling shareholder of the IDB Group, whose portfolio included prestigious concerns such as Nesher Cement, Super-sol, the Cellcom telecommunications company,the Netvision internet concern, and the Ma‘ariv newspaper.
He lost control of IDB Holdings in 2013 as the company fell tens of millions of dollars into debt. In December 2013, a court gave control of IDB to Argentinian real estate magnate Eduardo Elsztain and Israeli Moti Ben-Moshe in exchange for a massive cash injection.