Q. Recent months have seen the conviction of several religious Jews for illegal financial dealings, particularly money laundering. How does Judaism view such activities?
A. There are all sorts of ways to cheat the government and they are wrong whether you are religious or not. But religious people should be the first to remember that if they do something ethically wrong it is a chillul HaShem, a profanation of the Divine Name, and it is not only they but their religion that suffers disrepute. The Talmud states for example, “It is forbidden to deceive people, including gentiles” (Chullin 94a). The Magen Avraham says, “It is a greater sin to steal from a gentile than from a Jew, because the person concerned also profanes the name of God” (Tosefta Baba Kamma, ch. 10).
We have a principle of dina d’malchuta dina, found several times in the Talmud (Gittin 10b etc.), which says that “the law of the land is the law”. This does not apply indiscriminately, but it is certainly applicable in relation to the financial obligations of citizenship. Thus tax evasion is not only illegal: it is against halachah, though it is permitted to utilise any legal method of reducing a tax liability. It is also against halachah to obtain benefits to which one is not entitled, including the benefits that come from falsifying government forms.
There is a significant story told of Shimon ben Shetach, who purchased a mule from an Ishmaelite gentile. His students found a valuable diamond on the neck of the animal. They came to their master in great excitement and congratulated him, saying, “You will not need to work any more. God has just blessed you with great riches!” “Give it back!” said Shimon ben Shetach; “I bought a mule, not a diamond!” When the Ishmaelite received the diamond, he said, “Blessed is the God of Shimon ben Shetach!” (Deut. Rabba 3:5; Jer. B.M. ch.2, 8c).