Hareidi men in Bnei Brak (illustrative)
Hareidi men in Bnei Brak (illustrative)Israel news photo: Flash 90

A report Wednesday by State Comptroller Yosef Shapira said that Israeli tax authorities have failed, or been otherwise unable to collect tens of millions of shekels in taxes from institutions and individuals associated with the haredi community. Money is exchanged “under the table,” unreported to tax authorities, and funneled through charitable organizations and kashrut supervision groups known as “Badatzim.”

In addition, self-styled “Kabbalah” rabbis collected hundreds of millions of shekels from acolytes and believers – in cash, and without paying taxes.

The report examined the activities of 20 organizations that operate in the haredi community, for the period of April through October 2013. The Comptroller was responding to a series of complaints to police and tax officials on illicit activities in the Badatz organizations.

According to the report, 11 rabbis and six Badatz groups did “business” of about a billion shekels combined – NIS 887 million (about $250 million) to the credit of a single “Kabbalah rabbi.” The report did not disclose the rabbi's name.

The report said that it was unlikely that all the money had reached that rabbi's accounts as donations to him – but rather was probably being used to launder money, with depositors paying a fee to use the account for unreported income, and then withdrawing it.

“Tax authorities must increase their efforts to investigate these incidents and bring those perpetrating these crimes to justice,” the report said, adding that the Comptroller's office and other authorities have been demanding an investigation into such incidents since 2009.