Construction Firm Owner Jailed for Tax Fraud Scheme

An Israeli construction company owner has been sentenced to nine months in prison and fined NIS 50,000 for orchestrating a tax evasion scheme that defrauded the state of approximately NIS 300,000. The owner, Daoud Alhi, used eight fictitious invoices totaling around NIS 2 million to conceal the fraud. To further obscure the scheme, Alhi's company issued checks to another company, which he had taken control of, and recorded them in the accounting books. Alhi also had the other company's controller sign as a personal guarantor for these checks.

A portion of these checks was cashed by a third party, who used the funds to pay workers from the Palestinian territories employed at an event hall owned by Daoud Alhi, and to pay a professional for repairs at the same venue. The court found that the money paid by Alhi's company to the controlled entity ultimately returned to Alhi's company in cash, effectively masking the illicit financial flow.

In determining the sentence, the court considered that the defendants did not take responsibility and engaged in a lengthy trial. Alhi's prior criminal record, which did not include tax offenses, and his company's previous settlement involving a fine were also taken into account. However, the court acknowledged that the offense was fully rectified.

In addition to Alhi's nine-month prison sentence and NIS 50,000 fine, he received a suspended sentence. His company was fined an additional NIS 50,000. Nadar Alhi, the procurement manager, was sentenced to 100 hours of community service and a NIS 10,000 fine.