Money Laundering Attorney

A money laundering attorney represents individuals suspected of offenses under the Prohibition of Money Laundering Law, 5760-2000. In tax cases, the suspicion relies on a tax offense qualifying as a "predicate offense," which does not apply to every instance of tax evasion. According to the First Schedule to the Law, fraud under Section 220 of the Income Tax Ordinance constitutes a predicate offense — for example, when unreported income exceeds NIS 1,000,000 in a single year or NIS 2,500,000 over four years. When this threshold is met, property may be seized during the investigation and forfeiture may be sought following conviction. Send us your summons for questioning or the court order, and we will assess whether the statutory conditions are met.

In tax cases, a suspicion of money laundering typically arises in one of the following situations:

• You were questioned on suspicion of concealing income or VAT, and the investigators are asking about fund transfers, accounts held by relatives, or asset purchases.

• A temporary order has been imposed on a bank account, apartment, or vehicle even before an indictment has been filed.

• The indictment also includes an offense under Section 3 or 4 of the Prohibition of Money Laundering Law, along with a request to forfeit property.

• You transferred funds or registered an asset in your name on behalf of another person, and you are now being questioned in connection with that person's tax case.

• Cash or checks were seized from you at a border crossing because you failed to declare them.

• You received a notice from a committee regarding the imposition of a financial sanction for a reporting violation.

Amendment 14 to the Law, enacted in 2016, added three categories of tax offenses to the First Schedule. Each category requires that at least one condition be met:

• Income Tax (Item 17B): Fraud under Section 220 of the Ordinance, where income exceeds NIS 2,500,000 over four years or NIS 1,000,000 in a single year, or NIS 625,000 when the offense was committed with sophistication.

• VAT (Item 17A): An offense under Section 117(b)(1), (3) through (8), or (b1) of the VAT Law, where the tax exceeds NIS 480,000 over 48 months or NIS 170,000 over 12 months, or NIS 120,000 when committed with sophistication. These offenses, such as issuing an invoice without an underlying transaction, are explained on the Fictitious Invoices Attorney.

• Real Estate Taxation (Item 17C): An offense under Section 98(g2) of the Real Estate Taxation Law, for example, omitting a transaction value exceeding NIS 1,500,000.

In all categories, a connection to a criminal organization or a terrorist organization is also sufficient. There is an additional condition that significantly broadens the scope: when the laundering act is carried out by someone other than the taxpayer, the tax offense qualifies as a predicate offense regardless of the amount. This means that a family member or service provider who transferred the money may also come under suspicion.

Section 3(a) of the Law prohibits performing a transaction with prohibited property in order to conceal or disguise its origin, punishable by up to ten years' imprisonment. Section 3(b) applies to anyone who acts to prevent a bank from reporting or to cause it to file an inaccurate report (up to five years). Section 4 prohibits performing a transaction with property while knowing it is prohibited property, above an amount specified in the Second Schedule, punishable by up to seven years. Under Section 5, it is sufficient to prove that the actor knew the property was prohibited, even if they did not know from which offense it originated.

Seizure During the Investigation

Before conviction, property may only be seized, not forfeited. A District Court may, upon the request of a District Attorney, issue a temporary order over property even before an indictment is filed, if there are grounds to believe the property may disappear. The order expires if no indictment is filed within 90 days, and an order issued ex parte is valid for up to 10 days, after which you are heard as well (Section 36F of the Dangerous Drugs Ordinance, applicable under Section 23 of the Law). The decision may be appealed within 30 days. The practical aspects of releasing funds from an account are detailed on the page Releasing a Frozen or Seized Bank Account.

Forfeiture After Conviction

A person convicted under Section 3 or 4 will be ordered by the court to forfeit property from their assets equal in value to the property involved in or obtained from the offense, unless special reasons exist (Section 21). Because forfeiture is value-based, it may apply even to assets purchased with lawful funds, and if the convicted person's assets are insufficient, it may also extend to property transferred to another person without consideration after the offense. The forfeiture request appears in the indictment, and anyone claiming a right to the property may present arguments before the decision is made.

Anyone entering or leaving Israel must declare funds in their possession starting from NIS 50,000, and at the Nitzana, Jordan River, Yitzhak Rabin, and Taba crossings starting from NIS 12,000 (Section 9 and the Fourth Schedule to the Law). According to Customs Form 84, "funds" include cash, checks, traveler's checks, bearer securities, and payment cards.

If you failed to declare, a police officer or customs official may seize the amount exceeding the threshold without a court order. If no financial sanction is imposed and no indictment is filed within 10 days, the money is returned, unless the court extends the seizure by an additional 10 days (Section 11). The maximum sanction is five times the undeclared amount, or half the fine under Section 61(a)(4) of the Penal Law if that amount is higher, and a person who pays the sanction will not be prosecuted for the violation (Section 15). The sanction demand may be appealed to the Magistrates' Court within 30 days (Section 20).

1. We first examine the predicate offense: the amount involved, the relevant tax years, and who committed it. If none of the conditions in the First Schedule are met, there is no predicate offense, and the money laundering suspicion cannot stand.

2. We map all property that has been seized or is at risk of seizure, and distinguish between funds with a proven source and funds that are in dispute. For this purpose, you should bring bank statements, agreements, and filed tax returns.

3. We file a motion to release or reduce the seizure, proposing alternative security where possible, while simultaneously preparing representation for the interrogation.

4. We manage the civil tax case concurrently. Payment of the tax and amendment of the returns also affect decisions in the criminal proceedings.

5. If an indictment with a forfeiture request has been filed, we represent you in the proceedings and in the forfeiture hearing, including arguments by family members claiming rights to the property.

These cases are handled by Adv. and CPA Shlomi Vaknin and his firm's team. Shlomi, the firm's founder, served for nearly a decade as a national supervisor in the Professional Division of VAT at the Israel Tax Authority. In a money laundering case originating from a tax offense, the first question is an accounting one: what is the amount of income or tax in dispute, and whether it exceeds the threshold set in the Schedule.

The team also handles the civil side of the tax case concurrently.