Court sentences Deri in plea bargain conviction on tax offenses

No longer a lawmaker but still leader of Shas party, politician given 12-month suspended prison term along with NIS 180,000 fine

Shas leader Aryeh Deri leaves the Jerusalem Magistrate's Court on February 1, 2022 after his conviction on tax offenses. (Yonatan Sindel/Flash90)
Shas leader Aryeh Deri leaves the Jerusalem Magistrate's Court on February 1, 2022 after his conviction on tax offenses. (Yonatan Sindel/Flash90)

Jerusalem Magistrate’s Court on Tuesday gave its final approval to a plea bargain signed by former Shas MK Aryeh Deri, handing the ultra-Orthodox politician and two-time convict a 12-month suspended prison sentence and a fine of NIS 180,000 for tax offenses.

Deri resigned from parliament last week, enabling him to dodge a conviction of moral turpitude that would have barred him from office for several years as part of a plea bargain. He was convicted the same day, marking the second conviction of his political career. He served prison time for the first.

Presiding Judge Shmuel Herbst said the sentence was “balanced and suitable.”

In its sentencing, the court noted that any concern that Deri might in future again “harm the public coffers” was assuaged by the “certainty” that he would have no further dealings with matters of “public economic interest since he will be distanced from the public sphere.”

After the court hearing, Deri expressed his relief that the plea deal had been approved, saying only that “there is no greater joy than the removal of doubt, thank God.”

Though he is no longer a lawmaker, Deri intends to remain at the helm of the ultra-Orthodox Shas party.

A senior Shas figure told The Times of Israel last week that Deri’s plea deal and resignation will in practice change little beyond his absence as a legislator. Deri will continue to participate in full Knesset life, as if he were an MK without voting power.

Shas party chairman Aryeh Deri seen after being sentenced in a plea bargain for tax offenses at the Jerusalem Magistrate’s Court on February 1, 2022. (Yonatan Sindel/Flash90)

“He’s the address for everything that happens with Shas. Just, technically, he’s not a member of Knesset,” the source said.

According to the Shas source, Deri will continue to lead the Shas party’s Monday faction meetings and will remain Shas’s representative at the “right-wing bloc” party head meetings held in opposition leader MK Benjamin Netanyahu’s office.

If elections are called at any time moving forward, Deri can run for office and return to full formal power, unless the Central Elections Committee votes to bar him from doing so.

“The law enables him to do this,” the source said.

Shas party chairman Aryeh Deri seen after a being sentenced in a plea bargain for tax offense at the Jerusalem Magistrate’s Court on February 1, 2022. (Yonatan Sindel/Flash90)

Deri inked a plea deal in December to resolve tax offenses connected to real estate transactions. As part of the deal, Deri agreed to admit to not paying income taxes on an apartment sale and making false statements, and resigned from the Knesset and will pay the fine.

Last month the Supreme Court rejected an appeal filed by the Movement for Quality Government in Israel lobby group against the plea deal, in which it had demanded Deri’s conviction carry with it moral turpitude.

The petition claimed that the state is required to request that the court convict Deri of moral turpitude for his actions. But the Supreme Court rejected the petition, ruling that the plea deal can stand as is, and that any attempt by Deri to return to politics can be assessed by the courts in the future.

Deri had initially been suspected of bribery when the investigation began five years ago, but Attorney General Avichai Mandelblit ended up accusing him of the lesser offenses of failing to report income to tax authorities on two occasions and additional tax offenses committed while selling Jerusalem apartments to his brother Shlomo Deri.

Deri was also charged over his ties with the Green Ocean investment fund, which had been paying him commissions for bringing in new investors. When Deri returned to the Knesset in 2013 he instructed that the commissions be transferred to his brother and, by not properly reporting the paper trail, received NIS 534,000 in 2014-2015 without paying tax.

In 2018, police recommended filing charges against Deri on suspicion of committing fraud, breach of trust, obstructing court proceedings, money laundering and tax offenses involving millions of shekels. In 2019, then-state prosecutor Shai Nitzan recommended charging the Shas chairman, but many of those charges were ultimately dropped earlier this year.

Deri previously served 22 months in prison from 2000 to 2002 after he was convicted of taking bribes while serving as interior minister. That verdict carried moral turpitude. In 2013 he returned to politics, reclaiming the leadership of Shas and ultimately returning to serve as interior minister from 2016 until last year when his party entered the opposition. A court had ruled that his prior conviction did not disqualify him from the position.

Plea deals and convictions of moral turpitude are currently being hotly discussed in Israel, as reports swirl that former prime minister Benjamin Netanyahu is possibly on the brink of signing his own plea deal in his three ongoing corruption cases.

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