One of the leading figures in the Israeli film industry, Yoram Globus, was taken into custody and later released on bail amounting to more than half a million dollars for alleged tax fraud.
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By Albert Hecht
Yoram Globus, the legendary film producer, cinema owner and distributor is under investigation by the Israeli Tax Authorities for failing to report income as well as interest on capital which he withdrew from two of his companies into his private account during 2005.
The tax authorities are claiming that Globus failed to report the withdrawals amounting to a total of $7.3 million which they claim was ultimately disguised as a form of bad debt. If these charges are proven Globus is also liable to pay around $4 million in interest that would have accrued on the undeclared income.
Yoram Globus sprung to prominence in the nineteen seventies in Israel when he, in partnership with his cousin Menahem Golan, produced a highly successful “Lemon Popsicle” film series as well as a number of other local cult movies. Following their success, the duo pursued their success all the way to Hollywood, where they enjoyed international success as film producers and directors, with such a pulp movies as Cobra, Delta Force One, and even a Superman movie to add to their credits. After more than twenty years the United States Globus and Golan returned to Israel, no longer in partnership, with Globus retaining his interests in local film distributorship as well as operating a chain of cinemas.
According to a representative of the Israel tax authorities the suspected tax avoidance was revealed after intense examination of Globus’s tax returns which revealed two separate cash transfers from companies in the Globus group to Yoram Globus’s private bank account. The first from Globus Films were 13.2 million shekels and the other company trading under the title of, Busch Establishment where additional sum of 13.5 million shekels made its way into Globus’s private account. Representatives of the Israeli Tax Authorities, while requesting that Globus be remanded in custody pointed out that the former film director never made any attempt to report these financial transactions, as well as failing to report any interest that he may have earned on these sums as personal income. The tax authorities are also taking Globus to task on the fact that in both cases as soon as the withdrawals to Globus’s account were made, the companies also ceased to submit the annual reports as is required by the Israeli Tax Authorities.
According to details released to date by the Tax Authorities regarding their preliminary investigations on the alleged tax fraud, Globus failed to inform his accountant regarding the withdrawals, thus evading reporting income. In his defence, it is reported that Globus advised the Tax Authorities, that the money he had taken from the companies in question were in the form of loans, which were yet to be returned, and that he was prepared to pay interest on the outstanding balances.
For the meantime, Globus’s globetrotting days are over as the Judge, Tirtsa Shacham Keinan, who reviewed the Tax Authority case, while granting bail, did disallow him from leaving the country for a period of no less than 180 days.
Hollywood, Do you remember Yoram Globus
Yoram Globus began to hit the headlines when he and Menachem Golan uprooted their operations to Los Angeles in 1979, taking over the reins at Cannon Group Inc., then a little known independent film studio. The dynamic duo of Golan Globus succeeded in paralleling their success in Israel to a much higher level in the pressure cook of Hollywood, piloting Cannon ‘s dynamic growth towards becoming the leading independent production company in the industry as well as building a distribution empire that covered most of the United States as well as Europe.