Danny Dankner, the former chairman of Bank Hapoalim who was once its most influential figure, was indicted this week by Israel’s Justice Ministry on a variety of charges, including fraud and money laundering. Dankner was charged with criminal action in four different cases.
The first indictment brought by Israeli authorities against Dankner is in connection with Bank Hapoalim’s 2005 acquisition of Turkey’s Pozitif Bank, wherein Dankner is accused of gaining personal benefit from the deal. The indictment charges him with breach of trust vis-à-vis Bank Hapoalim, conflict of interest regarding the RP Group, fraud and harming the proper management of the bank’s business. The second indictment encompasses charges of fraud related to the Dutch DHB bank, breach of trust toward Bank Hapoalim, receiving goods by means of fraud, taking action with forbidden property, corporate breach of trust and misconduct.
The third indictment against Dankner includes charges of receiving credit by means of fraud from Bank Hapoalim, receiving goods by means of fraud and taking action with forbidden property. The fourth charge revolves around Dankner using the bank account of his personal secretary, Hagit Malka, for his own needs, based on the discovery that financial transactions in Malka’s account were as high as NIS 13.8 million ($3.5 million). The defendant is charged with money laundering in this case. As part of its investigation, the State Attorney’s office has asked for the confiscation of about NIS 700,000 ($180,000) found in Malka’s account at Bank Hapoalim.
Dankner was a member of Bank Hapoalim’s board of directors from late 1997 until the beginning of 2004, when he was elevated to the position of deputy chairman of the board. In May 2004, he acceded to a demand by the Bank of Israel’s Supervisor of Banks to give up that role, and resumed his place on the board of directors. Around the same time, Dankner was appointed as chairman of Poalim Capital Markets, the investment banking division of Bank Hapoalim. Three years later, he was appointed chairman of the bank’s board of directors, and remained in that position until July 2009, when he was ordered to resign in accordance with a demand by the Bank of Israel.
The central bank has never provided an explanation for its removal of Dankner from the chairmanship of Bank Hapoalim’s board. Dankner’s lawyers have stated that he is confident he will be acquitted “once this unnecessary procedure comes to an end.”
During the time that Dankner served on Bank Hapoalim’s board of directors, the financial bigwig continued his extensive personal business activities, including the maintenance of holdings in both Elran (D.D.) Investments Ltd., a public company that has real estate holdings, and a company registered in Romania that conducted business with television broadcasts. The indictment charges Dankner with failing to properly disclose his holdings in Elran.
This past August, investigators suspected Dankner of bribery and tax evasion in connection with the Holyland scandal. They claimed that he allegedly paid bribes totaling NIS 1.5 million ($396,000) to the director of Israel Lands Administration, Yaakov Efrati, in exchange for the promise that industrial land owned by Dankner in Atlit would be converted into profitable real estate developments.
Bank Hapoalim was sold by the Israeli government – under whose ownership it had grown to become the largest bank in the Jewish state – in 1996 to a group of investors headed by Ted Arison. Its current owner is Shari Arison.
In the fall of 2009, several senior employees of Bank Hapoalim were controversially indicted in Tel Aviv District Court on suspicions of money laundering and fraud. The employees were said to have helped Israeli-Russian businessman Arcadi Gaydamak and the Italian-Israeli businessman Nahum Galmor carry out a deception of the shareholders of Dutch chemicals company Thermphos.