Ramla Court Sentences Fire-Safety Company Owner to 44 Months in Tax Case

A magistrates’ court in Ramla has sentenced Avner Elok, owner of Sagiv Fire Protection Technologies Ltd., to 44 months’ imprisonment after finding him guilty of serious tax offences. The sentence concerns the company’s use of invoices that the court found did not reflect genuine transactions, and the resulting deductions of input VAT.

The ruling covers conduct between 2012 and 2015. During that period, the company received 139 fictitious invoices from five different companies, included them in its periodic VAT returns and deducted approximately NIS 5.75 million in input VAT, the court found. Elok was convicted of 35 counts of unlawfully deducting input VAT, alongside other offences connected with false accounting records and fraudulent use or authorisation.

Input VAT is normally the VAT a business pays on eligible purchases and may offset against VAT collected from customers. The distinction in this case was whether the invoices represented real business transactions. The court concluded that the invoices at issue did not do so, meaning the VAT deductions based on them were not lawful.

The indictment was filed in 2018. It alleged that Elok had sought to obscure his role by appointing different people to management posts at various times. He denied the charges. After the evidence was heard, the court found that the people appointed to those roles were secondary figures who acted under his direction, and that he was the dominant figure in carrying out the offences.

The distinction between the accusation and the outcome is important. The management appointments were part of the case set out in the 2018 indictment, while the prison term followed a completed trial, conviction and sentencing decision. The court’s findings addressed both the invoices included in the company’s VAT returns and Elok’s role in the conduct. The new development is therefore the sentence imposed on the completed case, rather than a fresh administrative tax assessment or an untested allegation.

In determining the penalty, the court treated Elok’s previous criminal record as an aggravating factor. It noted earlier tax convictions, including one for which he had served a prison sentence. The court also noted that no part of the financial shortfall had been remedied.

Elok argued that his punishment should be aligned with the sentence given to another person involved in the case. The court rejected that argument, pointing to differences in the roles played, the scale of the offending and the personal and criminal circumstances considered. It also declined to reduce the sentence because of the time that had passed since the conduct. The decision noted that Elok had requested numerous adjournments and that no evidence was heard for four years of the proceedings.

Alongside the 44-month prison term, the court imposed 10 months of suspended imprisonment and a NIS 100,000 fine. If the fine is not paid, the order provides for a further 10 months’ imprisonment instead. The company itself received a nominal fine.

The case is a current sentencing decision about historical conduct, not a new allegation. Its practical consequence is the court’s prison term, suspended sentence and financial penalty for the owner, together with the separate nominal fine imposed on the company.