"I have reached the conclusion that the seizure of the Applicants' art objects and jewelry suffered from a double flaw: the seizure was made unlawfully from the outset, in deviation from the seizure order issued by the court at the request of the police, and despite the fact that the police intended and prepared in advance to seize the artifacts. Even in retrospect, the police did not return to the court with a request for instructions regarding the continued possession of the seized art objects and jewelry."
However, it was explained that the defect does not automatically require the return of the seized:
"Similarly, an asset or object may be seized illegally, but the court that heard the matter will examine the seizure retroactively, while giving weight to the illegal seizure (compare various criminal applications 9022/16 Grika v. State of Israel [published in Nevo] (December 22, 2016), where the court approved the seizure despite the defects in the search warrant)."
Therefore, the honorable Supreme Court made a distinction between the seized persons, while in the case of some of them it ordered their return to the suspects, and found that the validity of the detention of the other type should be extended, and thus ruled:
"In order to balance the serious defect that occurred in the seizure proceedings of the artifacts and jewelry, and the need to ensure future forfeiture that is in line with the public interest, I order as follows:
The seized jewelry will be returned to the appellants immediately. This, given that the illegality of the seizure of some of the jewelry even involved an additional dimension of humiliation, and bordered on a search of the body without a warrant. It is hard to believe that the court would have permitted the forfeiture of personal jewelry and watches in the course of an investigation.
The seized art objects will remain occupied at this stage. However, if the judicial review takes place after six months, in accordance with section 35 of the IPC, and in the framework of the balance of interests between the conflicting interests, the court will also give weight to the illegality involved in the seizure (for the range of the various considerations within the framework of the balance of interests, see, for example, the Largo case, pp. 12-14)."
- The implications of Elovitch's case for our case are clear. Sometimes, a defect in seizure will result in the return of the seized object to its owner, but sometimes a smaller defect will not require the return of the objects.
In many respects, the flaw in Elovitch was much more serious than in our case. In Elovitch, the seizure (illegally) was planned and deliberate, without a warrant, and after all, the investigative unit there arrived at the suspects' home prepared to seize the art objects and jewelry, even though the judicial order did not allow it. In our case, we are dealing with lawful penetration, and the argument is that there was a delayed flaw in the transfer of the material (which was permitted to be transferred), because of the existence of a property aspect that the investigating unit should have addressed. Moreover, in the Elovitch case, there was no difficulty in the form of seizures that had long since been transferred to the possession of a foreign country, overseas, in accordance with a judicial order there that authorizes the seizure.
- In the case of the subject of the appeal, even if the proceeding had taken place as undertook in my approach, I find it difficult to imagine arguments that would have justified returning the material to the appellant, since this would have thwarted any possibility of resolving it later, and the appellant would have quickly changed the code and prevented this, of course (the appellant himself testified in the trial court that this would have been the case if the reconstruction kernels had not been transferred).
- To this must be added the complexity, primacy and precedent of the case, as expressed in the state's different view vis-à-vis the defense, and a direct continuation of the trial court's decision. In addition, the Honorable Court of First Instance presented a series of convincing arguments (in chapters 11 and 12 of the decision) that can have implications both for the intensity of the defect and for the public interest that stands in the way (harm to the effectiveness of the investigation in economic cases, harm to cooperation between countries in order to deal with global crime, harm to the efficiency of the investigation and the prolongation of the investigation proceedings). While it was possible to deal with some of the difficulties presented by the trial court by "cheap and available" means, such as demanding an undertaking, or applying an appropriate request to the court, it is still impossible to ignore the significant practical difficulties that the trial court noted at length in its decision (chapter 11).
- To this, it should be added that the products of the search for computer materials were requested from the outset by virtue of a request for extension of search warrants that was granted in the framework of a request for legal aid for the authorities in the United States , and that the very act of transferring the material was necessitated by the process of transfer under the Legal Aid Act. I will recall that on May 8, 2019, the court granted a request to extend the search warrants, as part of a request to "approve the transfer of the products to the United States..." Hence, there was no defect in the very transfer of the materials to the United States.
- According to the findings, it can be concluded that the defect is mainly due to the failure of the police to ensure that the information regarding the reconstruction kernels would not be made of property and did not allow a hearing for the claimant. To be precise, the transfer of the reconstruction kernels (in the evidentiary aspect of the information) was lawful. However, in view of the property characteristics, the police should have addressed the possibility that they would be used (temporary) for the purpose of forfeiture of the Bitcoin there, and should have taken measures that would clarify the legal difficulty involved, and act to prevent an irreversible move that would result in damage to the appellant's property (in light of section 39 of the Legal Aid Law, or at least section 30 of the law, and by way of associating the recovery kernels, even temporarily, with an Israeli government wallet).
- It should be clarified that I do not take lightly a defect whose strength is not negligible in my eyes. The chronology of the sequence, and especially the immediacy of the transfer of the materials without any reservations, leave question marks as stated above. However, it is not possible to ignore the complex circumstances as extensively raised in the trial court's decision, and the accompanying interpretive issue. According to the Legal Aid Law, there are actually three tracks, according to sections 19, 30 and 39 of the law. The defense argued that the police should have acted in accordance with section 39 of the Legal Aid Law and should have completely refrained from taking the property outside of Israel. On the other hand, the respondent claimed that it acted correctly when it took the route under section 19 of the Legal Aid Law and transferred the material without any restriction or reservation. As for me, I am of the opinion that the appropriate route is in section 30 of the Law, which establishes a mechanism of seizure and allowing the claimant to claim the right to the property to raise his claiMs.
On the one hand, the deviation "from the right track" did indeed involve a violation of the appellant's rights. On the other hand, it can be assessed with the necessary caution that if the temporary seizure proceeding had taken place in Israel, the appellant would not have been able to present convincing arguments against the temporary seizure. It should be assumed that the seizures, even according to the proposed route (under section 30 of the Legal Aid Law), and even in the less worst-case scenario for the appellant, would have been held (in Israel) until the appellant's guilt was ascertained in the United States, so that the extent of the damage caused by the defect (which the temporary seizure was carried out by the authorities in the United States and not in Israel) is not as extensive as claimed.
- The appellant has at his disposal more moderate alternative remedies. Thus, for example, and without expressing a position on the merits of the claim, the Legal Aid Law stipulates that "if damage is caused to the object as a result of its transfer to the requesting State, the court may order compensation for the injured party from the State Treasury" (section 21(c) of the Law). Moreover, the appellant has the option of appealing the decision of the temporary seizure in the United States. And of course, there is an additional remedy of a civil action that the appellant can file.
- In contrast to these, the relief sought by the appellant is a difficult remedy in itself. Returning the seized persons to Israel (temporarily) for forfeiture at the end of the legal proceedings in the United States, by virtue of a lawfully issued American judicial order (and there is no other argument before me), is not a trivial act. As stated, the appellant has the option of convincing within the framework of the proceedings in the United States that the temporary seizure was born out of sin, or to wait until the end of the proceeding and to convince (if he is not acquitted) that there was no justification for the seizure and that there were flaws in the seizure process.
According to the appellant's approach, I must instruct the state to apply to the authorities in the United States to cancel the seizure for the purpose of forfeiture and to return the seizure to the Israel Police for the purpose of conducting a legal proceeding in Israel. It is easy to understand how this move of turning the wheel back can raise considerable difficulties.
- In light of all of the above, I have reached the conclusion that the trial court was correct in its decision to reject the request for the return of the seized person, and therefore the appeal should be dismissed.
Granted today, May 18, 2025, in the absence of the parties.