Haim Katz convicted of minor fraud in plea deal, asks for suspended sentence

Currently, both the prosecution and the defense are making arguments to the court to endorse their recommendation that a suspended sentence (with no actual jail time) and a fine be his punishment.

 Likud MK Haim Katz speaks at a Knesset plenary session on his request for parliamentary immunity from prosecution, at the Knesset, the Israeli parliament in Jerusalem on February 17, 2020. (photo credit: YONATAN SINDEL)
Likud MK Haim Katz speaks at a Knesset plenary session on his request for parliamentary immunity from prosecution, at the Knesset, the Israeli parliament in Jerusalem on February 17, 2020.
(photo credit: YONATAN SINDEL)

Likud MK and former minister Haim Katz has been convicted on Monday on a minor fraud charge as part of a plea bargain at the Rishon LeZion Magistrate's Court.

Currently, both the prosecution and the defense are making arguments to the court to endorse their recommendation that a suspended sentence (with no actual jail time) and a fine be his punishment.

The hearing comes one day after the High Court of Justice on Sunday night rejected a petition by The Movement for the Quality of Government in Israel to impose a finding of moral turpitude which would have ended Katz's political career.

On November 9, Attorney-General Avichai Mandelblit filed an indictment against Katz.

Part of the deal includes Katz waiving his parliamentary immunity and an agreement by the sides to seek a sentence including a fine and a suspended prison sentence, but without actually serving any jail time.

 Attorney General Avichai Mandelblit. He is something of a weather vane for the new government.  (credit: TOMER NEUBERG/FLASH90) Attorney General Avichai Mandelblit. He is something of a weather vane for the new government. (credit: TOMER NEUBERG/FLASH90)

The actual final charge in the deal was a conspiracy to achieve a goal which in and of itself was legal, but by illegal means, relating to Katz’s abuse of his power as former Knesset Social Welfare Committee chairman.

Katz also still serves as a key power broker within the Likud and has a heavy role in when Likud primaries may occur.

The Movement for the Quality of Government in Israel had slammed Mandelblit, saying he had lost his nerve in cutting a lenient deal with Katz, which included no jail time.

Further, the NGO cited Mandelblit’s own prior statements about how serious Katz’s conduct had been as ammunition for its arguments that the minor charge was insufficient and would essentially embolden other corrupt politicians to think that fraud is worth it because there will be little consequences even if they are caught.

In October 2020, Mandelblit announced that he was leaning toward indicting the senior Likud MK for NIS 2.2 million in tax fraud.

In February 2020, under a prior government, the Knesset voted to grant Katz immunity from a prior indictment that Mandelblit had decided to file.

If no deal was reached, Mandelblit had also told the court that he may try once again to remove Katz’s immunity regarding the prior indictment with the new Knesset as well as to indict him under the new tax fraud charges at the same time.

According to a previous Justice Ministry statement, between 2007 and 2018, Katz earned significant rental income from seven real estate properties in his name and in the name of certain family members.

The statement said that with regard to some of the properties, Katz had failed to report his rental income entirely to the tax authorities, and with others he had only partially reported and did so significantly late.

Previously, lawyer Navit Negev said that the charges were administrative and not criminal, and that the only reason the allegations had been pushed into the criminal sphere was because of Katz’s political status.

She added that the allegations would be rebutted as well as the pre-indictment hearing, noting that even the ministry’s statement had recognized that some of the properties were not in Katz’s name.

In August 2019, Mandelblit announced he would file the earlier and even more serious indictment against Katz for fraud and breach of trust.

According to that indictment, Katz had violated conflict of interest principles in his economic dealings with Equital Ltd.’s Motti Ben Ari on several occasions and covered it up to obtain illegal economic gains for the two of them. This narrative was highlighted in the amended indictment filed as part of the plea deal.

Katz loudly supported a 2010 reform to the country’s insolvency laws which was allegedly specifically targeted to help Ben Ari and his company – in which Katz himself also had heavy investments.

This would mean that Katz helped advance legislation to personally benefit himself along with his primary financial adviser and close friend.

In the past, a spokeswoman for Katz noted that the Knesset had not only granted him immunity in February 2020, but also said that he had not committed even an ethical violation.

Though the Knesset saved Katz from that indictment going to court at the time, Mandelblit’s decision itself forced him to resign his ministerial portfolio, and the new Knesset could have reviewed the earlier Knesset’s grant of immunity.

The newer tax charges might not have given Katz a chance at parliamentary immunity since the tax violations were, unlike the prior charges, unrelated to his role as a public servant.

Mandelblit’s August 2019 decision had already cleared Katz of charges in a third affair, the Israel Aerospace Industries case, in which the police had recommended he be indicted.