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No longer an MK, Deri convicted of tax offenses in plea bargain

Shas party leader already resigned as part of agreement to avoid moral turpitude charge; prosecutors seek NIS 180,000 fine and 12-month suspended sentence

Former MK Aryeh Deri, leader of the Shas party, arrives for a hearing at the Jerusalem Magistrates' Court  on January 25, 2022. (Yonatan Sindel/Flash90)
Former MK Aryeh Deri, leader of the Shas party, arrives for a hearing at the Jerusalem Magistrates' Court on January 25, 2022. (Yonatan Sindel/Flash90)

Shas party leader Aryeh Deri was convicted of tax offenses Tuesday after pleading guilty at the Jerusalem Magistrate’s Court as part of an agreement with prosecutors that also saw him resign from the Knesset.

The ruling came as Deri’s resignation from parliament, made Sunday, took effect, enabling him to dodge a conviction of moral turpitude — relevant to public officials — which would have barred him from returning to office for several years.

Prosecutors have asked for a 12-month suspended sentence and a fine of NIS 180,000 ($56,665). The court will hand down a sentence later.

The plea deal included admitting to five income tax offenses and one of land tax violation.

Prosecutors asked the court to take into consideration that Deri had taken responsibility for his actions as reflected in retirement from political life, and had reached a plea agreement early in the judicial process, the Kan public broadcaster reported.

Deri will remain chief of the ultra-Orthodox Shas party but will be replaced in the Knesset by the next candidate on the Shas list, Yosef Taieb, a former MK who is the head of the party’s French-language activities.

Last week 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 reassessed by the courts in the future.

It was Deri’s second conviction during his political career.

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.

Then-MK Aryeh Deri seen during a plenum session in the assembly hall of the Knesset, in Jerusalem on January 19, 2022. (Yonatan Sindel/Flash90)

In January 2021, Attorney General Avichai Mandelblit announced that he intended to file criminal charges against Deri, pending a hearing.

Deri had initially been suspected of bribery when the investigation began five years ago, but 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.

Following the announcement of the plea deal last month, Deri said that he would continue to lead the Shas party “with full force and faith.”

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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