Mizrahi Tefahot Bank Sues Ex-Employee for $1.8 Million Theft
Translated & summarized from Ice by baba
Mizrahi Tefahot Bank is suing a former teller for allegedly stealing 1.81 million shekels over 18 months by manipulating cash and coin records. The fraud was uncovered after a client's tip led to an investigation revealing suspicious transactions in the employee's accounts. The bank seeks to withhold her severance pay, while the employee denies the charges, attributing her account activity to loans and claiming others had vault access.
The story in 6 lines · by baba
- Mizrahi Tefahot Bank sued a former employee for allegedly stealing 1.81 million shekels over 18 months.
- The employee allegedly manipulated cash and coin records to conceal the systematic theft.
- The fraud was uncovered by chance after a client mentioned the teller to the branch manager.
- An investigation revealed suspicious financial activity in the employee's and her family's accounts.
- The bank seeks to withhold the employee's severance pay of approximately 175,000 shekels.
- The former employee denies the allegations, citing family loans and other employees' access.
Mizrahi Tefahot Bank has filed a civil lawsuit against a former employee, accusing her of systematically stealing approximately 1.81 million shekels over an 18-month period. The alleged theft occurred between November 2024 and May 2026, while the woman, who worked at the bank for about 11 years, was solely responsible for the branch's cash drawer and vault as a teller. According to the lawsuit, she would remove cash from the drawer and record it in the computer system as if it had been converted into an equivalent value of coins. This created fictitious coin entries, inflating their recorded value from 9% to 82% of the total cash in the vault. A physical count in May 2026 revealed only about 19,000 shekels in coins, despite the system showing nearly 1.9 million shekels.
The fraud was not detected by internal controls but was uncovered due to a chance encounter. A client facing financial difficulties mentioned to the branch manager that someone in the gray market had referred her to the teller. This prompted an investigation that revealed suspicious financial activity totaling about 1.5 million shekels in the employee's and her relatives' accounts, disproportionate to her monthly salary of approximately 11,600 shekels. The employee was suspended, and a surprise count on May 21st revealed the significant cash deficit.
Following her dismissal in August with the workers' committee's agreement, the bank filed a police complaint. The current lawsuit seeks to withhold her severance pay, estimated at about 175,000 shekels. The bank's action highlights global findings by the Association of Certified Fraud Examiners (ACFE) that internal employees are involved in about 90% of organizational fraud cases, often due to poor oversight.
The former employee vehemently denies the allegations. During a hearing, she claimed other employees also had access to the vault and that her account activity stemmed from family loans. Her attorney, Lior Katzav, stated that the lawsuit is baseless, lacks evidence, and constitutes a severe defamation, expecting the bank to apologize in court.
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