State: Singing star Eyal Golan failed to declare millions

One of Israel's most successful Mediterranean music performers, Eyal Golan, was indicted Sunday for allegedly trying to evade taxes in the scope of 2.5 millions shekels ($707,000).

Golan's production company, Liam Productions, as well as two top executives in his company -- Golan Sharabi and Arik Bnei-Moshe -- are among the defendants. Bnei Moshe, a tax adviser, was on the company's payroll as its top accountant.

According to the Israel Tax Authority, the defendants engaged in a tax-evasion scheme that involved revenue from Golan's concerts in Israel and on private cruises outside Israel's territorial waters. All three were arrested in January 2011 as part of a probe launched by the authority's Tax Investigations and Value Added Tax Division and its Jerusalem office.

According to Osnat Barzilay, the head of the National Unit for Customs Cases, the defendants engaged in the alleged activities between 2007 and 2010. According to the indictment, in 2008, Golan performed eight times on cruises and raked in NIS 256,000 ($72,000) but reported an income of only NIS 45,000 ($12,700).

The Israel Tax Authority claims that the defendants had vendors and service providers issue fake invoices for transactions that never took place, and the supposed expenditures indicated on the invoices were later reported by Golan's company on its tax returns in an effort to have them deducted from VAT payments. The billing scheme allegedly encompassed about NIS 2.3 million ($650,000). The defendants allegedly paid vendors a 5% commission on the stated figure in the forged invoice.

Golan is the latest in a string of Mediterranean music performers charged with tax evasion: Moshe Peretz and his manager were indicted over undeclared income in May; Kobi Peretz is facing a pre-trial hearing where he will be confronted with charges that he has failed to report NIS 5.2 million ($1.47 million).

Liam Productions issued a statement saying that "When Eyal found out about the financial irregularities he instructed the company to address them and appointed a special team of advisers and managers to do that. Eyal was not personally involved in the acts that were mentioned in the indictment. The responsibility that he had was limited to that of a manager and an owner of a company. Liam Productions has no doubt that Eyal is innocent."