Mizrachi Tefahot Bank Accuses Ex-Teller of Embezzling $1.8 Million

Mizrachi Tefahot Bank has filed a lawsuit against a former employee, accusing her of embezzling approximately 1.81 million shekels over a period of about 18 months, from November 2024 to May 2026. The employee, who worked at the bank for approximately 11 years, was allegedly the sole person responsible for the branch's cash vault, with access to the safe and responsible for daily cash counts. According to the bank's claim, the teller would remove cash from the vault and, instead of reporting the shortage, would record in the computer that the bills were replaced with coins of equal value. This created a situation where the total cash amount in the vault appeared unchanged on paper, even though the recorded coins did not physically exist.

Over time, the bank alleges, this practice led to the recorded value of coins in the vault increasing from 9% to 82% of the total cash. By May 2026, coins worth approximately 1.9 million shekels were recorded, but a physical count revealed only about 19,000 shekels in coins. The bank claims the employee gradually reduced the recorded bill balance while increasing the coin balance.

The suspicion of embezzlement was reportedly not triggered by the discrepancy between bills and coins, but rather by a customer complaint. In May 2026, a branch manager reported to internal audit that a customer facing financial difficulties mentioned being referred to the employee by someone in the "gray market." An examination of the employee's and her family members' accounts revealed unusual financial transactions totaling about 1.5 million shekels, despite her monthly salary being 11,600 shekels.

Following these findings, the employee was suspended. A count on May 21, 2026, conducted by the branch manager, revealed a shortage of 1.81 million shekels. The employee has denied the accusations. Her lawyers argued during a hearing that the bank failed to prove the money was stolen or that she was responsible for its disappearance, and that other employees also had access to the safe. They also stated that the financial movements in her accounts were related to loans and transfers from family members and acquaintances.

The bank dismissed the employee in August 2026, with the consent of the workers' committee, and filed a police complaint and a civil lawsuit. The current lawsuit seeks to deny her severance pay of approximately 175,000 shekels and have it returned to the bank. The case highlights the risks organizations face from within, with a study by the Association of Certified Fraud Examiners indicating that 90% of embezzlement cases are committed by company employees, often due to a lack of internal controls.