Israeli Tax Authority Investigates Man for Millions in Undeclared Crypto and Russian Bank Holdings

Israeli tax authorities have opened an investigation into Leonid Lepeshov, a former Haifa resident, for allegedly failing to report significant income from cryptocurrency trading and foreign bank accounts. Lepeshov, who listed his occupation as a salaried employee until 2024, is suspected of conducting virtual currency transactions totaling approximately 2 million shekels (about $540,000 USD) between 2019 and 2021 without proper tax reporting. The investigation also revealed that Lepeshov allegedly held three bank accounts in Russia, with one account reportedly containing around $500,000 USD, another with 600,000 Russian rubles, and a third with 20,000 Euros.

The Israel Tax Authority alleges that Lepeshov used "fraud, trickery, and deceit" to evade taxes on these undeclared earnings. The charges include income omission under the Income Tax Ordinance and violations of the Anti-Money Laundering Law. The authority claims to have evidence linking Lepeshov to high-volume virtual currency trading on foreign platforms without reporting to the tax authorities. The reported 2 million shekel figure represents the volume of transactions, not profit or tax liability, and the lack of reporting complicates the calculation of capital gains tax.

Lepeshov was arrested and brought before the Haifa Magistrate's Court, where he was released under restrictive conditions. These conditions include a 40,000 shekel cash deposit, a 250,000 shekel personal guarantee, a 150,000 shekel third-party guarantee, a 180-day travel ban, and the surrender of his passport. He reportedly chose to remain silent during the investigation and stated his current address is with his mother.

The timing of the investigation is notable, as it commenced just two days after the expiration of a voluntary disclosure window offered by the Tax Authority. This program, which ended on August 31, 2026, allowed individuals to regularize their undeclared assets without facing criminal prosecution, provided they initiated contact before an investigation began. The Tax Authority reported low utilization of this program, with only 383 applications filed, declaring a total of approximately 877 million shekels in assets.

Tax officials have emphasized their increasing focus on investigating undeclared cryptocurrency holdings, citing significant investments in intelligence and investigative capabilities. The current case follows similar investigations launched by the Tax Authority against other cryptocurrency holders, including cases involving tens of millions of shekels and allegations of money laundering and income concealment related to NFT sales.