Yechiel testified that his brother was interested in the defendant's activity and that he had reviewed the landing page as well as the video (P/62, 2023, p. 354, paras. 27-38; p. 355, paras. 1-7; p. 360, para. 20; see also P/64, pp. 2-3). The witness noted that the defendant's statements regarding past returns and the low risk influenced him to invest "100 percent" (P. June 22, 2023, p. 355, para. 29). In addition, the presentation of the defendant as experienced, an expert in computers, and an accumulation of satisfied customers, also clearly influenced the decision to invest through the defendant (P. 22.6.2023, p. 355, paras. 35-38).
Buskila stated that he came to the defendant after seeing a post on Facebook and had viewed the landing page (P. 26.2.2023, p. 262, para. 36; p. 266, paras. 19-28; p. 267, paras. 1-7; P/76, p. 5). The witness noted that representations regarding the low risk influenced his decision to invest at a "relatively high" level, as well as the representation regarding the return of 25% (P. 26.2.2023, p. 269, s. 12; p. 268, s. 4).
- Beyond the testimonies of the clients that indicate the existence of a causal connection, the considerable gap between the erroneous representations and the truth strengthens the conclusion that without the representations, the consent of the customers would not have been given. Why should ordinary people put their trust in a defendant with whom they have no connection and whom they only became acquainted with from the publications? The customers' goal was clear - to maximize profits. What motivated the clients was the expectation of profit, and if they had not understood that the investment through the defendant would advance the said viewing, they would not have risked their money and invested in a platform that was not familiar to them, and which the defendant brought to their attention.
- The defendant wrapped the expectation of profit in representations of experience and expertise, as well as in the envelope of legal activity, by not disclosing to them that he was operating without a lawful license. However, it is natural that some customers will place more emphasis on the element of experience and expertise and less on the question of legality, some will place more emphasis on the legality of the activity, and some will give their opinion on all the elements. This amplitude of possibilities finds expression in the customers' words as we mentioned above. In any event, the evidence shows that if it were not for the representations made by the defendant, the customers would not have opened an account, would not have deposited money into the account and allowed the defendant to carry out activity in it. Hence, the defendant's argument that the clients did not rely on the representations regarding the academic representations should be rejected because no client asked to see a certificate or certificates.
- The conclusion from the aforesaid is that the representations constituted, at the very least, the effective reason that caused the customers to give their consent to the management of the account by the defendant; moreover, without the representations, their consent would not have been given at all.
- I am correct to accept the defendant's argument that was raised in response to the indictment, that it is possible that if the defendant had revealed to the clients that he was supposed to win the sum of $100 for recruiting any investor, this would not have dissuaded them from investing. But this does not change the outcome. The accuser does not attribute the concealment of the benefit that the defendant received from Preston as part of the representations that she claims led to the receipt of "the thing". The representations made by the defendant were, as stated, on a variety of other topics.
- Finally, I do not believe that the questionnaire filled out by each client, or in the same risk document or in the warnings of the arena, is sufficient to disconnect the causal connection between the defendant's actions and the receipt of the matter. The defendant's representations did not constitute an omission (and this does not mean that an omission is not a representation in the appropriate circumstances). As clarified, the defendant made active representations regarding knowledge, expertise, and experience that can bring high and even permanent returns, through the use of the robot, which are not necessarily related to what the arena offers. A clear expression of this can be found in the defendant's words to one of the clients, in whom he bragged and said that "they changed the test after I published the video" (in which he answered the questions in the questions in P/14), and that "they [Pepperstone] are geniuses and we are cunning" (P/130, p. 120).
Conclusion
- The evidence before me shows that the factual foundations required for the conviction of the defendant for the offense of fraudulent receipt were met. In addition, the required mental element was also present. The defendant was aware of the factual elements of the offense, including that the representations he made did not reflect reality. The representations of experience and expertise do not depend on any external factor, but rather relate to the defendant himself, and therefore he knew that the representations regarding his experience and expertise were not correct at all. The fact that the defendant does not have a license to engage in investment management is also a fact that is well known to him and even more than any other person (and this is discussed at length below), and the same is true with regard to the fact that his activity was in violation of the law. This is on the cognitive level.
- As for the object component, as is well known, for the purpose of the consolidation of the offense, there is not necessarily a need to prove intent in the sense of the will to control the occurrence, and it is sufficient for "a state of mind of 'knowledge' that the claim is not true, or a state of mind of 'distrust' in the veracity of the claim" (Kedmi-Criminal; and see also Bank Leumi, at p. 22). In the case before us, it can be clearly concluded from the evidence that the defendant had a clear desire to obtain the consent of the clients to open accounts for them and to manage the accounts. The marketing actions made by means of untrue representations are intended and aimed at achieving the aforementioned result, i.e. that the customers will place their trust in him and allow him to trade in their accounts. In fact, this was the main goal of the system established by the defendant.
- Some of the clients (Kehat and Kovacs) stated in their testimony that they believed that the defendant had no "malicious intent" (February 26, 2023, p. 230, paras. 17 ff.; p. 232, paras. 6-18), and so did the defendant himself in his summaries. The claim is aimed at the fact that the defendant did not want to cause the loss of the customers. Indeed, I accept the factual argument that the defendant does not want the loss of the clients. On the contrary, he wanted the investors to achieve a return and even a high return on their investment, since the success of the investment is also his success. However, these words have no bearing on the question of the existence of the elements of the offense. First, the required objective element is the awareness of the possibility of achieving the result, and the result is - the customers' agreement to invest in Pepperstone and not the result of profit or loss for the client. Let us recall that this is the "thing" attributed to the defendant in the indictment. Second, even though the defendant did not want the customers to lose and only wished that they would make a profit, the evidence shows that he predicted with a high level of certainty that the investors might lose the investment, and it is sufficient to point out that he himself lost a lot of money in the investments he made through the robot. In the circumstances of the case, it is possible to apply the rule of expectation set forth in section 20(b) of the Penal Law; this is because it is clear that the defendant foresaw the outcome, as a near certainty, even if he wished for the opposite outcome to occur (see also Criminal Appeals Authority 7153/99 Elgad v. State of Israel, IsrSC 55(5) 729 (2001); Criminal Appeal 8721/04 Ohana v. State of Israel (June 17, 2007); Criminal Appeal 3372/11 Katzav v. State of Israel (November 10, 2011); Criminal Appeal 150/88 Lushi v. State of Israel, IsrSC 42(2) 650 (1988)).
- The scope of the activity and the losses incurred. In the first indictment, it was noted that the defendant "approached many potential customers ," but with regard to the fraud offenses themselves, it was claimed that the defendant fraudulently obtained the consent of "at least" nine customers to carry out trades that they deposited in the merchant's arena; and to subtract one of the customers who did not testify, the eight were involved.
In section 15 of the indictment, it is claimed that the total amount of money invested by the clients was approximately US₪135,000, which is approximately ILS 435,000.