Mizrahi-Tefahot Bank Sues Former Employee Over 1.81 Million Shekel Embezzlement
Mizrahi-Tefahot Bank sued a former employee for allegedly embezzling 1.81 million shekels over 18 months by manipulating cash and coin records.
Mizrahi-Tefahot Bank has filed a lawsuit in the Tel Aviv Regional Labor Court against a former employee, alleging the embezzlement of 1.81 million shekels over a period of approximately a year and a half, from November 2024 to May 2026. The employee had worked at the bank for about 11 years and was reportedly the sole person responsible for the branch's cash desk, with access to the safe and the duty of conducting daily cash counts.
According to the lawsuit, the teller allegedly removed cash banknotes from the branch's reserves and, instead of reporting the shortfall, recorded in the computer system that the bills had been exchanged for coins of equivalent value. On paper, the total amount of money remained unchanged, even though the registered coins did not physically exist. Over time, this discrepancy grew as the proportion of registered coins surged from 9% to 82% of the total cash. By May 2026, the system recorded about 1.9 million shekels in coins, whereas a physical count revealed only about 19,000 shekels.
Surprisingly, the scheme was uncovered not through the glaring discrepancy between banknotes and coins, but rather following a customer complaint. In May, the branch manager informed internal audit that a client facing financial difficulties stated she was directed to the employee by a loan shark. An investigation into the accounts of the employee and her family members revealed unusual financial transactions totaling approximately 1.5 million shekels, despite her monthly salary being 11,600 shekels. Following these findings, the employee was suspended, and a physical count on May 21 uncovered a deficit of 1.81 million shekels. The bank subsequently terminated her employment in August with the approval of the workers' committee, filed a police complaint, and initiated civil proceedings seeking to forfeit 175,000 shekels in severance pay.
The defendant's attorney, Lior Katzav, strongly denied the allegations, calling the lawsuit baseless and absurd. He stated that the bank failed to provide concrete evidence linking his client to the missing funds and that other staff members also had access to the safe. He added that the financial transfers in her accounts had legitimate explanations, such as loans and family assistance, and demanded an apology from the bank management.
