Israeli supermodel Bar Refaeli and her mother, Tzipi, are suspected of tax evasion for allegedly not reporting millions of dollars in income earned abroad and luxury perks. The authorities' investigation of Refaeli was the worst-kept secret in Israel this week, although a gag order kept her name and face out of the media until Thursday. Court papers filed by tax investigators and released to the Israeli media said Refaeli had lived in luxury apartments in Tel Aviv in recent years but that her brother and mother had signed the leases to conceal her residency and evade potential tax bills on millions of dollars in foreign earnings. Media reports said the authorities were also looking into whether taxes should have been paid on "celebrity discounts" and perks such as cars that the model received in Israel, discounts on home and rental prices, and on expensive interior design bills. The Israeli Tax Authority said Thursday that among a series of alleged unreported income and perks, Refaeli did not report the free Range Rover and Lexus cars she received from car companies in exchange for published photos of herself with the cars. The cars allegedly remained registered under the importer's names as display models, but were used by Refaeli. Refaeli, 30, a former host of the music talent show X-Factor Israel, was questioned for 12 hours by tax investigators on Wednesday, during which she reportedly broke down in tears. She was not taken into custody, but at a Tel Aviv Magistrates' Court hearing on Thursday, at which she was not required to appear, Judge Yaron Gat ordered that she and her mother request approval from tax authorities and post a $65,000 bond before any future overseas travel. A third-party guarantee of $128,000 would also be required. During the tax authority investigation, a senior employee at Tel Aviv's YOO luxury apartment complex allegedly revealed that the development company had paid one landlord $51,000 in addition to monthly rent to have Refaeli live in the complex as part of a branding strategy, in which news of the supermodel's residence there would be "leaked" to the media. Refaeli admitted that she lived there. In another incident, Refaeli's mother was accused of acquiring a home in her daughter's name, for which she allegedly received a $128,000 discount in exchange for publicizing the new property as belonging to the supermodel. Lawyers for the model, who according to Israeli media reports is worth up to $20 million, rejected the accusations. Her lawyers said the case centered on a long-running dispute with Israeli authorities over whether Refaeli, a former Sports Illustrated swimsuit cover model, should be considered a resident of Israel for tax purposes. Refaeli's attorney said: "We believe this is a civil dispute. There is no reason for a criminal investigation." Yair Rabinovich, a former Israeli national tax commissioner, said on Israel Radio that residency classification depended on a combination of factors, including the number of days spent in the country and whether Israel was at "the center of one's life." Sources close to the supermodel say the allegations against her and her mother are false. "All monetary matters have been strictly and carefully handled from the moment she first stepped in front of a camera until now, both abroad and in Israel," said one source. Those close to her also expressed concern. "She's never been investigated, she doesn't have a criminal past, and no one finds a 12-hour interrogation pleasant," one friend said. "But Bar has been through drama, and she will come out on top of this too." Refaeli, who for a time dated Hollywood actor Leonardo DiCaprio, married Israeli businessman Adi Ezra in September at a wedding attended by more than 300 people.
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