An investigation by the Tax Authority, the Securities Authority or Lahav 433? This is how it runs.

An economic investigation is long, document-based, and dangerous not only because of prison: seized computers, frozen assets, an exit ban, publication, and the business itself. Most of that damage can be reduced, if the work starts on day one.

Written by the team at the law office of Adv. Aviad Hayat · updated 1.10.2026

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According to the State Comptroller (2024), a tax file takes on average 14.5 months from transfer to the prosecution until an indictment, after an investigation lasting one to four years. Of the income-tax files that were concluded, more than half (55%) ended in a compounding payment rather than an indictment. How you conduct yourself in the investigation decides which side of that number you are on.

Seven rules from the moment the investigators arrive

1Ask for the warrant, and read itA search of a home or office is done under a judge's warrant, and penetrating a computer requires an express warrant (section 23A of the Criminal Procedure Ordinance). Record what is seized, ask for a seizure list, and do not interfere. Physical resistance is an offence; legal resistance comes afterwards.
2Do not answer questions before you have consulted"We just want to clarify a few things" is questioning. You have the right to consult a lawyer before being questioned, whether you came in yourself or were detained for a few hours. A lawyer arriving at the search is not an obstruction, it is a right.
3Do not touch documents, computers or moneyDestroying documents or deleting is obstruction (section 244 of the Penal Law, up to three years) and a tax offence in itself (section 216). Moving money or assets after the search may count as money laundering and lead to freezing orders. Everything stays where it is.
4Do not coordinate versions: not with partners, not with your accountantTalking to others involved is obstruction. And the accountant, the bookkeeper and the adviser are not privileged: they are witnesses, and usually questioned before you. Only the conversation with the lawyer is privileged.
5Gather your documents, in orderReturns, books, contracts, bank statements, correspondence. Not to hand to the police, but so the lawyer knows what is really in the file before you answer a single question.
6Check whether you may leave the countryA police officer may condition release on depositing a passport for up to three months, and the court may order an exit ban. A trip planned in advance is arranged by application, not at the airport.
7Keep quiet outwardlyNot to employees, not to clients, not to journalists. From 2026 there is an automatic 48-hour ban on publishing a suspect's name, and a gag order can be requested (section 70 of the Courts Law). The message to the business and the family is written together, once.

These are general rules. In the meeting we decide what is handed over, what is not, and to whom, according to the investigating authority and the suspicion.

What matters to know about the law

1Your computers and phonesPenetrating a computer only under an express warrant. You are entitled to a copy of computer material within four days (extendable to 16), and a computer not belonging to an institution is returned within 30 days. Seized property is returned if no indictment is filed within six months, unless the court extended. At the Securities Authority: 12 months.Criminal Procedure (Arrest and Search) Ordinance, sections 23A, 32, 32A and 35; Securities Law, section 56B
2Privilege against self-incriminationThere is no duty to give evidence that admits an element of an offence, and compelled evidence is inadmissible. On the other hand, the Income Tax Ordinance requires you to appear and answer questions (section 216). Between those two duties walks the lawyer: what is handed over as a document, and what you stay silent on.Evidence Ordinance, section 47; Income Tax Ordinance, section 216(2)
3Lawyer-client privilege onlyConversations and documents exchanged with a lawyer for legal advice are privileged. An accountant, tax adviser and bookkeeper are not. Employees, partners and family are not. That changes whom you update, and what you write in email.Evidence Ordinance, section 48
4Short detention, long conditionsIn economic cases detention is usually short: release the same day or after one hearing, on conditions. An officer may condition release on depositing a passport for up to three months and a no-contact order for up to 30 days; the court may order an exit ban, a ban on entering the business and an occupational ban.Arrests Law, sections 42 and 48
5Compounding instead of an indictmentThe Director of the Tax Authority may, with the suspect's consent, convert the criminal proceeding into a compounding payment of up to twice the maximum fine. With the decision the proceedings stop, and there is no conviction. In VAT: up to the maximum fine, and after an indictment only with the Attorney General's consent. The compounding committees consider a reasoned application, not a bare one.Income Tax Ordinance, section 221; Value Added Tax Law, section 121
6Forfeiture and temporary ordersOn a money-laundering conviction forfeiture is the rule ("unless for special reasons"), by value, even if the property was transferred to another. Already at the investigation stage temporary orders can be issued on assets and accounts. The orders can be contested, and most relief is obtained at that stage.Prohibition on Money Laundering Law, sections 21 to 23
7A hearing before indictmentIn felonies (tax evasion under section 220, money laundering, bribery, securities fraud) the prosecution must give notice before filing an indictment, and you have 30 days to request a hearing in writing. In economic cases the hearing is sometimes the central proceeding: that is where the charges, the amounts and the alternatives are argued.Criminal Procedure Law, section 60A

Officers: an active manager, partner, bookkeeper and responsible clerk are deemed guilty of the company's tax offence, unless they prove they did not know and took all reasonable measures (section 224A of the Income Tax Ordinance; section 119 of the VAT Law).

From the opening to the decision

Step 1The covert openingAn audit, a bank report, intelligence or a complaint. Months of collection before you know anything. Sometimes the first sign is a summons to the accountant or an employee.
Step 2Search dayIn the morning, at home and at the office in parallel. Warrants, seizure of computers, phones and documents, questioning under caution the same day, and sometimes a short detention. This is the day when a lawyer on the spot changes the most.
Step 3Rounds of questioningSeveral interviews, sometimes weeks apart: documents shown, confrontations, questions on every transfer. Between interviews we work on the material, and arrive at each one prepared.
Step 4Assets and leaving the countryTemporary orders on accounts and assets, an exit ban, passport deposit, conditions on the business. For all of these we seek relief: living expenses, salaries for employees, work trips.
Step 5The long waitOne to four years of investigation, then the prosecution. Meanwhile: return of seized property, applications for compounding or closure, and sometimes an administrative proceeding at the Securities Authority instead of a criminal one.
Step 6The hearingA notice letter, 30 days, the main evidence. In a well-run economic case the hearing drops charges, reduces amounts, and sometimes ends the case in compounding, a conditional arrangement or closure.
Step 7Indictment and trialIf filed: a plea arrangement or trial. Sentencing policy is strict: bribery (Holyland, Cr.A. 4456/14) and years of prison for fictitious invoices (Cr.App.Req. 2384/24, 2025). That is why the work is done in the stages before.

According to the State Comptroller, 38% of files transferred to the prosecution exceeded the Attorney General's timelines (18 months for a felony). Time is not only a burden: it is also an argument.

How an economic case ends

CompoundingPayment instead of a criminal proceedingIn tax offences: a reasoned application to the compounding committee, payment, and the end of the proceeding without a conviction and without a criminal record. In 2023 there were 98 compounding decisions. Not for every case, not for every amount, and not after every kind of conduct in the investigation.
ClosureLack of evidence or lack of guiltEconomic cases are closed when criminal intent is not proven: a mistake, reliance on an adviser, a dispute of interpretation. About 15% of the tax files that were closed, were closed for lack of evidence. The closure ground can be appealed and a change requested.
Administrative enforcementAt the Securities AuthorityThe administrative enforcement committee instead of a criminal proceeding: a financial sanction (up to one million shekels for an individual, five million for a corporation), compensation to victims, a ban on serving as an officer for up to a year. No conviction and no prison. Not in every case, and not automatically.
Arrangement or indictmentAnd what can still be influencedEven with an indictment: the charges, the amounts, the forfeiture, the fine, and if there is prison, its length and how it is served. Community service instead of actual prison is limited to nine months, and that is a target set in negotiation.

Sources: Income Tax Ordinance, section 221; Securities Law, chapter H4; Criminal Procedure Law, sections 62 and 67A. In an economic case a "win" is usually an ending without a conviction, not an acquittal after years.

What we actually do

On search dayWe arrive at the scene, read the warrant, document the seizure, and meet you before the questioning. If you were detained, we represent you at the hearing the same day and arrange release on conditions you can live with.
In the interviewsWe study the material before each round, build the version around the documents, and decide what is handed over and what is not. We work with defence accountants and experts, under privilege.
Assets, computers and passportWe apply for the return of computers and phones, copies of material, relief from temporary orders, and exit permits for work trips. The business has to keep working while the case runs.
Ending the caseA compounding application, a hearing, an administrative proceeding or an arrangement, according to the case. And if needed, a trial. Quietly: we approach the media only when it serves you, and only with your consent.

The fee is set in advance, in writing, by stage. In a long case that matters twice as much.

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Questions we are asked after a search

Will I be arrested?

In economic cases detention is usually short: hours, or one hearing. Release comes with conditions: passport deposit, no contact with others involved, sometimes a ban on entering the business. The conditions are argued over, and can be changed later.

When do I get my computers and phones back?

A copy of the computer material within four days (up to 16 if deferred). A personal computer within 30 days. Other property: within six months if there is no indictment, unless the court extended. We file these applications at once.

Can my accountant talk?

Yes, and usually they already have. There is no privilege for an accountant, a tax adviser or a bookkeeper. Only for a lawyer. That is why the professional opinion for the defence is commissioned through the lawyer, so it is privileged.

What is compounding, and who gets it?

Converting the criminal proceeding into a payment, with your consent, without a conviction. A compounding committee at the Tax Authority weighs the severity, the amount, your record, cooperation and correction of the reports. A good application is built from the start, not at the last minute.

What is the penalty for tax evasion?

Wilful evasion (section 220): up to seven years in prison and a fine, plus twice the concealed income. An incorrect return without reasonable excuse (section 217): up to two years. Fictitious invoices (section 117(b) of the VAT Law): up to five years, and seven in aggravated circumstances.

And what is money laundering, if I did not steal?

An action in property originating in an offence, including large tax offences, in order to conceal it: up to ten years (section 3). Knowingly acting in prohibited property worth 150,000 shekels or more is also an offence (section 4). With the conviction comes forfeiture. That is why this charge is usually the central fight at the hearing.

I am an officer. The company or me?

Both. An active manager, partner or bookkeeper is deemed guilty of the company's tax offence, unless they proved they did not know and took all reasonable measures (section 224A). That defence is built from documents, so keeping them matters.

Is there a voluntary disclosure procedure?

Yes, under a temporary order published in August 2025 and valid until 31.8.2026, in an identified track only. It is not open to anyone already under investigation or audit, or about whom the Authority holds information. So it is a route for someone not yet investigated, and it has to be decided quickly.

Will my name be published?

From 2026 there is an automatic 48-hour ban on publishing a suspect's name from the questioning or the first hearing. A gag order can be requested if publication would harm the investigation or cause you serious harm. The application is filed at the first hearing, not after the headline.

How long will it take?

One to four years of investigation, then the prosecution. Meanwhile the business continues, and we work on returning property, relief and an early ending. A case that ends in compounding or closure after a year and a half is a good result.

How much does it cost?

You will know the fee exactly, in writing, before committing, by stage: search and questioning, hearing, trial. No surprises.

In the press, on economic cases

25.03.2025 · MaarivThe Akko municipality corruption affair: representing nine of the suspects 26.09.2025 · ynetThe apartments scam: "A law-abiding woman with no record, herself a victim"31.03.2020 · CalcalistCOVID "fake news" messages: "The state is acting against a man who committed no offense"All mentions, by date

Which authority, and when?

Leave a number and we call back fast. You can ask us to call from an unlisted number, and to meet outside the office. No need to describe the suspicion in the form.