Man Sentenced to 22 Months for $11 Million Fake Invoices Scheme

Moshe Zaken has been sentenced to 22 months in prison for his role in a large-scale fraud involving fake invoices totaling 42 million shekels (approximately $11 million) between 2018 and 2020. Zaken, the owner of the manpower company Migdalor Human Resources, which supplied crane operators to construction sites, admitted to participating in the scheme. The prosecution had sought a 42-month sentence, but the court opted for a lighter penalty due to Zaken's confession and the commencement of his rehabilitation process.

The scheme involved paying crane operators partly in cash and issuing reduced salary slips for the remainder. To reduce Migdalor's tax liability and facilitate cash withdrawals, fake invoices for "crane services" were issued to various businesses. Bank transfers and checks were made to these businesses against the fake invoices, and the funds were then withdrawn in cash to pay salaries and other undeclared expenses.

Zaken pleaded guilty to numerous severe tax offenses, including income tax and VAT violations, which carry potential sentences of up to seven years per offense. An original charge of aggravated fraud was dropped as part of the plea deal. He also admitted to aiding in illicit financial transactions under the Anti-Money Laundering Law, rather than directly committing them.

The defense highlighted Zaken's significant personal debts and a double penalty of 1.8 million shekels imposed by the Tax Authority, noting that he and his wife are facing eviction from their home to sell it to cover debts. They argued for a sentence between 12 and 30 months. The court acknowledged the severity and sophistication of the criminal plan, which caused significant damage to public funds, but ultimately reduced the sentence based on Zaken's confession, his agreement to forfeit substantial assets, and his participation in a rehabilitation program.

As part of the agreement, Zaken will forfeit 270,000 shekels from his assets, and 1.4 million shekels will be seized from Migdalor's funds. The court imposed a fine of only 10,000 shekels, considering Zaken's dire financial situation, which would prevent him from paying a larger fine and could lead to an extended prison term. Legal proceedings are ongoing against Yitzhak Schreiber, who allegedly played a more significant role in the offenses.