Ransom instead of criminal proceedings: The most expensive (but perhaps the smartest) compromise you will ever make

In the real world, not everyone who commits a criminal offense is sent to court – and fortunately, not every mistake on a VAT report or accidental tax evasion ends in an indictment. Sometimes, there is a middle ground. In that middle ground lies the “money ransom”: a tool that allows the tax authority and the suspect to reach an agreement in which the criminal case is closed, in exchange for a substantial payment.

Sounds convenient? It depends on who you ask. It’s not a magic solution, nor a get-out-of-jail-free card. But when used correctly, it can save a career, preserve a good name – and most importantly, prevent a series of complications that are better avoided in the first place.

What is a heretic anyway, and why does it exist?

A money ransom is a sanction imposed by the Tax Authority’s Ransom Committee, as an alternative to criminal proceedings.

In other words: a person suspected of a tax offense can, instead of facing an indictment, offer to pay a sum of money to the state – and in return, the authority will close the criminal case.

One can quickly understand that this is a type of “quiet plea bargain,” only without a court, without publicity, and sometimes – without exposure at all. To some in the public, this sounds unfair. To professionals, this is one of the important tools for smart management of tax enforcement in a country that does not have an endless number of prosecutors, judges, and tax inspectors.

Can anyone ask for a ransom?

No. The Ransom Committee can only be contacted when the Tax Authority is convinced that it is an offense for which there is sufficient evidence – but the procedure can be terminated without a trial.

Conditions for participating in this game:

• The suspect admits to the facts to one degree or another.
• He is willing to pay a substantial amount, as a percentage of the tax not paid or deducted, the range is between 15% and 30%.
• This is not a very serious offense (for example, not money laundering or serious forgery).
• There is cooperation with the investigation.
• No relevant criminal record
• The Authority believes that there is no clear public interest in conducting a public case.
  

What does the procedure look like – step by step?

1. Opening a criminal investigation – Carried out by the Tax Authority. If the findings indicate an offense, the file is transferred to the Investigations Department, at the conclusion of which the investigation file is submitted for legal review regarding further handling on the civil and criminal levels.
2. Removal of the default – In order to enter the gates of the ransom committee, the applicant must remove his defaults and pay the tax amounts that were deducted.
3. Contacting the Ransom Committee – Through the lawyer, a formal request is submitted to convert the criminal proceedings into a money ransom. The request includes details about the offense, mitigating circumstances, and personal background.
4. Committee discussion – The Ransom Committee, a designated body within the Tax Authority, examines each case on its own merits. It is not obligated to accept the request. It can also reject it completely.
5. Committee Considerations – When examining the possibility of converting a criminal proceeding into a monetary ransom payment, a variety of considerations are considered, including:

Considerations in favor of imposing a financial ransom

א. The severity of the offense – When the offense involves a relatively small financial amount, or when the suspect’s degree of guilt is low, as well as in accordance with the laws that have been ruled on in similar cases.
b. The degree of involvement and initiative in committing the offense – We will examine whether the suspect served as the main perpetrator or whether he was a marginal and secondary figure.

c. Special personal circumstances – Such as advanced age, a serious medical condition or significant disability, a personal disaster, etc.

e. The situation of family members dependent on the offender – Especially when there is actual financial or health dependency.

d. Systemic public consideration – When conducting a criminal proceeding would cause harm that outweighs the benefit, due, among other things, to a burden on the judicial system or the lack of a real deterrent effect.

f Correction of the offense and removal of omissions – Such as paying the full tax, correcting financial statements and reports that have been submitted.

G. Additional exceptional considerations, which are taken into account only in exceptional cases:

• The suspect being a disabled IDF soldier or having a significant security background, as well as his contribution to society.
• The degree of cooperation he demonstrated during the investigation proceedings.
• An unusual and unreasonable lapse of time, when the delay is not due to the suspect’s conduct.
  

Considerations against imposing a financial ransom

A. Previous criminal history – including previous convictions or cases where ransom has already been imposed in the past.

b. The severity of the offense – When a significant financial amount is involved, an ongoing offense, or in cases where the defaults have not been remedied.

c. Committing the offense by a representative – When it involves a person acting within the scope of his role as a representative of others, thereby aggravating the circumstances.

e. Sectoral deterrence considerations – In areas where there is a proliferation of tax offenses that constitute a widespread phenomenon (“state crime”).

d. Damage to public trust – Offenses committed in breach of a duty of trust or loyalty, especially when it involves professionals.

f Additional offenses – When the offense under tax law is accompanied by additional offenses under the Penal Code or other laws.

G. Previous refusal of ransom offer – In cases where an offer to settle the matter with a ransom was previously made, but the suspect refused it.

H. Making a decision – and payment – If the request is accepted, the applicant must pay the amount within a specified period of time. Upon payment – ​​the case is closed, and there is no indictment.

But wait – what does paying a ransom mean?

• No criminal record – heresy is not considered a conviction, and therefore there is no disgrace, no police registration, and no fundamental impediment to continuing to hold public office or run a business.
  
• There is recognition of the offense. – Even if there is no conviction, the mere agreement to pay a ransom may be considered a factual admission of guilt. This is very important in any context of related civil proceedings, such as tax assessments, claims from customers or creditors.
  
• There is no absolute confidentiality – the decisions of the ransom committees are published by the authority.
  
• There is no normal appeal option – the decision on the ransom cannot be appealed normally like a judgment. Requests for reconsideration can be submitted, but the scope is limited.

And most importantly – not alone

Managing and submitting a ransom request requires a deep understanding of the criminal and civil procedures at the Tax Authority. This is not the time for improvisation, nor for emotion, nor for gut feelings. Every word in the request is examined. Every circumstance is taken into account. Sometimes, it is precisely the smallest argument and the most routine-sounding sentence that convince the committee.

In conclusion – compromise? Yes. Concession? Absolutely not.

Ransom is not a bribe, nor is it a way for the rich to evade justice. It is a legitimate, wise solution, and sometimes the best legal course of action a person can take. But it must be done carefully, wisely, and in truly professional hands.