Murdoch Company in Israel Suspected of Evading Taxes

In what may turn out to be the largest tax evasion case in Israeli history, income tax officials here have raided the offices of a Jerusalem-based company owned by Australian media mogul Rupert Murdoch.

Sunday’s raid came amid allegations that the company had failed to pay taxes and royalties amounting to more than $150 million.

The raid was launched after Israeli tax authorities charged that the company, News Datacom, had developed a technology used by the Murdoch-owned Sky and Star television stations and franchises, from which it reaped tens of millions of dollars that went undeclared to the authorities.

Those involved in developing the technology were allegedly paid tens of thousands of dollars in various surreptitious manners, including stock options and payments to overseas accounts.

Tax auditors Sunday raided the home of Adi Shemer, a renowned mathematician from the Weizmann Institute of Science in Rehovot, who developed the technology.

They were also questioning professionals and lawyers in connections to the allegations.

These included partners from the law firm Herzog, Fuchs and Ne’eman — the firm of former Justice Minister Ya’acov Ne’eman — on suspicion that the firm provided consulting services even though it was aware of the illegal activities. Ne’eman recently stepped down as minister after he became the target of a separate police investigation.

Police also requested that a warrant for Murdoch’s arrest be issued, in the event he travels to Israel.

In response to the allegations, News Datacom issued a statement saying that it was appalled by the tax investigation.

It described the allegations as totally unfounded and an attempt at extortion by former employees.