This was after it was proven that this defendant was an active manager of Piccolo Line Ltd., and that he was the one who controlled it and its business, together with defendant 6.
The criminal liability of an active manager is set forth in various tax laws, such as: Section 23 of the Purchase Tax Law (Goods and Services), 5712-1952; Section 119 of the Value Added Tax Law, 5736-1975, and Section 224A of the Income Tax Ordinance [New Version], 5721-1961.
The prosecution claims that an active manager can also be someone who does not have a formal status or position in the corporation, and the fact that defendant 5 provided Piccolo-Line with management services in the tax appeal, including in the matter of imports, and the management of the financial and banking side, is sufficient to show that he is an active manager.
As an active manager, he is responsible, a kind of vicarious, for the commission of the offense committed in the corporation, even if he himself is not directly responsible for the commission of the offense.
The burden of proof imposed on the prosecution is a reduced burden, with the intention of "raising the level of caution of the officer and ensuring that the corporation fulfills its obligations under the law."
Therefore, according to the prosecution, the defendant should be convicted, alternatively, of being an active manager of Piccolo Line Ltd.
Attorney Ehud Dagan, counsel for defendant 5, argued that the defendant's sole involvement was in ordering the goods from Opsa, and sending them by ship to the port in Israel. He was not involved in the release of the goods from customs or in any activity with any entities in the local market. In addition, there is no claim that any offense was committed against the supplier, Opsa, and that it received the full consideration for the goods it sent to Israel.
Defendant 5's main position and argument is that he has no managerial or legal relationship with Piccolo-Line Ltd., and his entire role was limited to providing financing services and financial services, including office services, and authorization for the import and distribution of Opsa products in Israel. The Piccolo-Line company in the tax appeal belongs to and is managed by defendant 6, as is also evident from this defendant's statements to the police and his testimony in court.