The president of the Manufacturers Association of Israel, Shraga Brosh, and his brother Yariv, who is also a senior official in the organization, were arrested Wednesday on suspicion of falsifying documents to evade paying tax of about NIS 1.5 million ($410,00).
Tax authorities were alerted to possible wrongdoing after Brosh, a leading industrialist, filed paperwork dated from 2014 on a form that did not exist in that year.
Yariv Brosh is the chair of the Metals Industries Association, a division within the Manufacturers Association.
Both men were released on bail with restrictions Thursday after a hearing at the the Tel Aviv Magistrate’s Court the day before.
Their accountant Michael Bar Levav was also arrested on suspicion of assisting them to perpetrate the suspected fraud.
Investigators suspect the brothers tried to avoid paying 50 percent tax on NIS 8,640,000 ($2,368,526) from a 2015 business deal involving a company they own. Shraga Brosh allegedly filed documents last year showing the company, Orshad Natural Gas, is a family business, a status that would entitle them to pay just 30%, a saving of some NIS 1.5 million.
The documents apparently tried to show the company registered as a family business from 2014 — but the form used did not exist until years later.
Tax investigators searched the brothers’ homes, their offices, and the offices of two accountants, where they said they found relevant evidence.
A statement on behalf of Shraga Brosh said: “Mr. Brosh was surprised by the investigation, which deals with a very specific and narrow subject. This is the first time he has been investigated in any way after decades of extensive business and public activity. Mr. Brosh of course is cooperating and is convinced that in the shortest possible time that matter will be behind him.”
In 1996 Globes reported that Tel Aviv Magistrate’s Court sentenced an accountant named Michael Bar Levav to eight months in prison with a 15-month suspended sentence and a NIS 15,000 fine for falsifying tax invoices to omit clients’ revenues. A year later Globes said the Board of Certified Public Accountants revoked the accountant’s license for 3.5 years, retroactively staring from 1994, because of the conviction.